Landstar System (NASDAQ:LSTR) Is Increasing Its Dividend To $0.33
The board of Landstar System, Inc. (NASDAQ:LSTR) has announced that the dividend on 25th of August will be increased to $0.33, which will be 10% higher than last year's payment of $0.30 which covered the same period. This takes the annual payment to 1.6% of the current stock price, which is about average for the industry.
Check out our latest analysis for Landstar System
Landstar System's Earnings Easily Cover The Distributions
We like to see a healthy dividend yield, but that is only helpful to us if the payment can continue. However, Landstar System's earnings easily cover the dividend. As a result, a large proportion of what it earned was being reinvested back into the business.
The next year is set to see EPS grow by 13.2%. If the dividend continues on this path, the payout ratio could be 35% by next year, which we think can be pretty sustainable going forward.
Landstar System Has A Solid Track Record
The company has an extended history of paying stable dividends. The annual payment during the last 10 years was $0.24 in 2013, and the most recent fiscal year payment was $3.20. This means that it has been growing its distributions at 30% per annum over that time. Rapidly growing dividends for a long time is a very valuable feature for an income stock.
The Dividend Looks Likely To Grow
The company's investors will be pleased to have been receiving dividend income for some time. Landstar System has seen EPS rising for the last five years, at 12% per annum. With a decent amount of growth and a low payout ratio, we think this bodes well for Landstar System's prospects of growing its dividend payments in the future.
We Really Like Landstar System's Dividend
Overall, we think this could be an attractive income stock, and it is only getting better by paying a higher dividend this year. Distributions are quite easily covered by earnings, which are also being converted to cash flows. Taking this all into consideration, this looks like it could be a good dividend opportunity.
Companies possessing a stable dividend policy will likely enjoy greater investor interest than those suffering from a more inconsistent approach. At the same time, there are other factors our readers should be conscious of before pouring capital into a stock. Taking the debate a bit further, we've identified 1 warning sign for Landstar System that investors need to be conscious of moving forward. 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.
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