Mueller Water Products (NYSE:MWA) Will Pay A Dividend Of US$0.058
Mueller Water Products, Inc. (NYSE:MWA) will pay a dividend of US$0.058 on the 21st of February. Based on this payment, the dividend yield will be 1.8%, which is fairly typical for the industry.
Check out our latest analysis for Mueller Water Products
Mueller Water Products' Payment Has Solid Earnings Coverage
Solid dividend yields are great, but they only really help us if the payment is sustainable. Based on the last payment, Mueller Water Products was quite comfortably earning enough to cover the dividend. This means that a large portion of its earnings are being retained to grow the business.
Looking forward, earnings per share is forecast to rise by 37.3% over the next year. Assuming the dividend continues along recent trends, we think the payout ratio could be 43% by next year, which is in a pretty sustainable range.
Mueller Water Products Has A Solid Track Record
The company has an extended history of paying stable dividends. Since 2012, the first annual payment was US$0.07, compared to the most recent full-year payment of US$0.23. This works out to be a compound annual growth rate (CAGR) of approximately 13% a year 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.
Mueller Water Products Could Grow Its Dividend
The company's investors will be pleased to have been receiving dividend income for some time. It's encouraging to see Mueller Water Products has been growing its earnings per share at 9.9% a year over the past five years. Since earnings per share is growing at an acceptable rate, and the payout policy is balanced, we think the company is positioning itself well to grow earnings and dividends in the future.
Mueller Water Products Looks Like A Great Dividend Stock
In summary, it is good to see that the dividend is staying consistent, and we don't think there is any reason to suspect this might change over the medium term. Distributions are quite easily covered by earnings, which are also being converted to cash flows. All of these factors considered, we think this has solid potential as a dividend stock.
Companies possessing a stable dividend policy will likely enjoy greater investor interest than those suffering from a more inconsistent approach. Meanwhile, despite the importance of dividend payments, they are not the only factors our readers should know when assessing a company. Taking the debate a bit further, we've identified 2 warning signs for Mueller Water Products that investors need to be conscious of moving forward. We have also put together a list of global stocks with a solid dividend.
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