Mueller Industries (NYSE:MLI) Is Paying Out A Larger Dividend Than Last Year
The board of Mueller Industries, Inc. (NYSE:MLI) has announced that it will be increasing its dividend by 92% on the 1st of April to US$0.25. This takes the annual payment to 1.1% of the current stock price, which unfortunately is below what the industry is paying.
Check out our latest analysis for Mueller Industries
Mueller Industries' Dividend Is Well Covered By Earnings
If it is predictable over a long period, even low dividend yields can be attractive. However, Mueller Industries' earnings easily cover the dividend. This means that most of what the business earns is being used to help it grow.
If the trend of the last few years continues, EPS will grow by 35.9% over the next 12 months. If the dividend continues on this path, the payout ratio could be 6.1% by next year, which we think can be pretty sustainable going forward.
Mueller Industries Has A Solid Track Record
The company has an extended history of paying stable dividends. The dividend has gone from US$0.20 in 2012 to the most recent annual payment of US$0.52. This means that it has been growing its distributions at 10% per annum over that time. It is good to see that there has been strong dividend growth, and that there haven't been any cuts for a long time.
The Dividend Looks Likely To Grow
Investors could be attracted to the stock based on the quality of its payment history. It's encouraging to see Mueller Industries has been growing its earnings per share at 36% a year over the past five years. Earnings per share is growing at a solid clip, and the payout ratio is low which we think is an ideal combination in a dividend stock as the company can quite easily raise the dividend in the future.
We Really Like Mueller Industries' Dividend
Overall, a dividend increase is always good, and we think that Mueller Industries is a strong income stock thanks to its track record and growing earnings. Earnings are easily covering distributions, and the company is generating plenty of cash. 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. Still, investors need to consider a host of other factors, apart from dividend payments, when analysing a company. Taking the debate a bit further, we've identified 1 warning sign for Mueller Industries that investors need to be conscious of moving forward. 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.
