U.S. markets close in 3 hours
  • S&P 500

    4,271.90
    -33.30 (-0.77%)
     
  • Dow 30

    33,974.53
    -177.48 (-0.52%)
     
  • Nasdaq

    12,926.09
    -176.45 (-1.35%)
     
  • Russell 2000

    1,986.41
    -34.11 (-1.69%)
     
  • Crude Oil

    87.43
    +0.90 (+1.04%)
     
  • Gold

    1,776.70
    -13.00 (-0.73%)
     
  • Silver

    19.74
    -0.34 (-1.72%)
     
  • EUR/USD

    1.0169
    -0.0002 (-0.02%)
     
  • 10-Yr Bond

    2.8930
    +0.0690 (+2.44%)
     
  • GBP/USD

    1.2041
    -0.0054 (-0.44%)
     
  • USD/JPY

    135.4070
    +1.1920 (+0.89%)
     
  • BTC-USD

    23,439.67
    -342.75 (-1.44%)
     
  • CMC Crypto 200

    556.78
    -16.04 (-2.80%)
     
  • FTSE 100

    7,515.75
    -20.31 (-0.27%)
     
  • Nikkei 225

    29,222.77
    +353.86 (+1.23%)
     

Pentair (NYSE:PNR) Has Affirmed Its Dividend Of US$0.21

  • Oops!
    Something went wrong.
    Please try again later.
·2 min read
In this article:
  • Oops!
    Something went wrong.
    Please try again later.

The board of Pentair plc (NYSE:PNR) has announced that it will pay a dividend of US$0.21 per share on the 6th of May. This means the dividend yield will be fairly typical at 1.4%.

View our latest analysis for Pentair

Pentair's Dividend Is Well Covered By Earnings

We like a dividend to be consistent over the long term, so checking whether it is sustainable is important. However, Pentair's earnings easily cover the dividend. This means that most of what the business earns is being used to help it grow.

The next year is set to see EPS grow by 8.7%. If the dividend continues on this path, the payout ratio could be 20% by next year, which we think can be pretty sustainable going forward.

historic-dividend
historic-dividend

Dividend Volatility

While the company has been paying a dividend for a long time, it has cut the dividend at least once in the last 10 years. The dividend has gone from US$0.80 in 2012 to the most recent annual payment of US$0.84. Dividend payments have grown at less than 1% a year over this period. We're glad to see the dividend has risen, but with a limited rate of growth and fluctuations in the payments the total shareholder return may be limited.

The Dividend Looks Likely To Grow

Given that the dividend has been cut in the past, we need to check if earnings are growing and if that might lead to stronger dividends in the future. We are encouraged to see that Pentair has grown earnings per share at 28% per year over the past five years. A low payout ratio gives the company a lot of flexibility, and growing earnings also make it very easy for it to grow the dividend.

We Really Like Pentair's Dividend

Overall, we think that this is a great income investment, and we think that maintaining the dividend this year may have been a conservative choice. Distributions are quite easily covered by earnings, which are also being converted to cash flows. All in all, this checks a lot of the boxes we look for when choosing an income stock.

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. As an example, we've identified 2 warning signs for Pentair that you should be aware of before investing. Looking for more high-yielding dividend ideas? Try our collection of strong dividend payers.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.