Miller Industries (NYSE:MLR) Is Due To Pay A Dividend Of $0.18
The board of Miller Industries, Inc. (NYSE:MLR) has announced that it will pay a dividend of $0.18 per share on the 11th of December. This payment means that the dividend yield will be 1.8%, which is around the industry average.
Check out our latest analysis for Miller Industries
Miller Industries' Earnings Easily Cover The Distributions
We like a dividend to be consistent over the long term, so checking whether it is sustainable is important. Prior to this announcement, Miller Industries' dividend was only 16% of earnings, however it was paying out 265% of free cash flows. While the business may be attempting to set a balanced dividend policy, a cash payout ratio this high might expose the dividend to being cut if the business ran into some challenges.
Looking forward, earnings per share could rise by 9.4% over the next year if the trend from the last few years continues. Assuming the dividend continues along recent trends, we think the payout ratio could be 15% by next year, which is in a pretty sustainable range.
Miller Industries Has A Solid Track Record
The company has a sustained record of paying dividends with very little fluctuation. Since 2013, the dividend has gone from $0.56 total annually to $0.72. This implies that the company grew its distributions at a yearly rate of about 2.5% over that duration. Although we can't deny that the dividend has been remarkably stable in the past, the growth has been pretty muted.
We Could See Miller Industries' Dividend Growing
Investors could be attracted to the stock based on the quality of its payment history. Miller Industries has seen EPS rising for the last five years, at 9.4% per annum. Miller Industries definitely has the potential to grow its dividend in the future with earnings on an uptrend and a low payout ratio.
Our Thoughts On Miller Industries' Dividend
In summary, while it's good to see that the dividend hasn't been cut, we are a bit cautious about Miller Industries' payments, as there could be some issues with sustaining them into the future. With cash flows lacking, it is difficult to see how the company can sustain a dividend payment. We don't think Miller Industries is a great stock to add to your portfolio if income is your focus.
Market movements attest to how highly valued a consistent dividend policy is compared to one which is more unpredictable. At the same time, there are other factors our readers should be conscious of before pouring capital into a stock. Case in point: We've spotted 2 warning signs for Miller Industries (of which 1 is potentially serious!) you should know about. If you are a dividend investor, you might also want to look at our curated list of high yield dividend stocks.
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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.
