Hamilton Beach Brands Holding (NYSE:HBB) Has Affirmed Its Dividend Of $0.11
Hamilton Beach Brands Holding Company's (NYSE:HBB) investors are due to receive a payment of $0.11 per share on 15th of December. The dividend yield will be 3.5% based on this payment which is still above the industry average.
See our latest analysis for Hamilton Beach Brands Holding
Hamilton Beach Brands Holding's Payment Has Solid Earnings Coverage
We like to see robust dividend yields, but that doesn't matter if the payment isn't sustainable. The last dividend was quite easily covered by Hamilton Beach Brands Holding's earnings. This means that a large portion of its earnings are being retained to grow the business.
EPS is set to fall by 9.4% over the next 12 months if recent trends continue. If the dividend continues along the path it has been on recently, we estimate the payout ratio could be 58%, which is definitely feasible to continue.
Hamilton Beach Brands Holding Is Still Building Its Track Record
The dividend's track record has been pretty solid, but with only 6 years of history we want to see a few more years of history before making any solid conclusions. The dividend has gone from an annual total of $0.34 in 2017 to the most recent total annual payment of $0.44. This means that it has been growing its distributions at 4.4% per annum over that time. It's good to see at least some dividend growth. Yet with a relatively short dividend paying history, we wouldn't want to depend on this dividend too heavily.
Dividend Growth Is Doubtful
Investors could be attracted to the stock based on the quality of its payment history. However, things aren't all that rosy. In the last five years, Hamilton Beach Brands Holding's earnings per share has shrunk at approximately 9.4% per annum. If the company is making less over time, it naturally follows that it will also have to pay out less in dividends.
In Summary
Overall, we don't think this company makes a great dividend stock, even though the dividend wasn't cut this year. The company is generating plenty of cash, which could maintain the dividend for a while, but the track record hasn't been great. We would probably look elsewhere for an income investment.
Investors generally tend to favour companies with a consistent, stable dividend policy as opposed to those operating an irregular one. Meanwhile, despite the importance of dividend payments, they are not the only factors our readers should know when assessing a company. Just as an example, we've come across 3 warning signs for Hamilton Beach Brands Holding you should be aware of, and 1 of them is concerning. Looking for more high-yielding dividend ideas? Try our collection of strong dividend payers.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
