Schneider National, Inc. (NYSE:SNDR) Goes Ex-Dividend Soon
It looks like Schneider National, Inc. (NYSE:SNDR) is about to go ex-dividend in the next four days. Investors can purchase shares before the 10th of December in order to be eligible for this dividend, which will be paid on the 11th of January.
Schneider National's next dividend payment will be US$0.065 per share. Last year, in total, the company distributed US$0.26 to shareholders. Based on the last year's worth of payments, Schneider National stock has a trailing yield of around 1.2% on the current share price of $21.26. If you buy this business for its dividend, you should have an idea of whether Schneider National's dividend is reliable and sustainable. We need to see whether the dividend is covered by earnings and if it's growing.
See our latest analysis for Schneider National
Dividends are typically paid from company earnings. If a company pays more in dividends than it earned in profit, then the dividend could be unsustainable. Schneider National is paying out just 24% of its profit after tax, which is comfortably low and leaves plenty of breathing room in the case of adverse events. Yet cash flows are even more important than profits for assessing a dividend, so we need to see if the company generated enough cash to pay its distribution. What's good is that dividends were well covered by free cash flow, with the company paying out 13% of its cash flow last year.
It's encouraging to see that the dividend is covered by both profit and cash flow. This generally suggests the dividend is sustainable, as long as earnings don't drop precipitously.
Click here to see the company's payout ratio, plus analyst estimates of its future dividends.
Have Earnings And Dividends Been Growing?
Businesses with shrinking earnings are tricky from a dividend perspective. If earnings decline and the company is forced to cut its dividend, investors could watch the value of their investment go up in smoke. Schneider National's earnings have collapsed faster than Wile E Coyote's schemes to trap the Road Runner; down a tremendous 47% a year over the past five years.
Another key way to measure a company's dividend prospects is by measuring its historical rate of dividend growth. Since the start of our data, three years ago, Schneider National has lifted its dividend by approximately 9.1% a year on average.
Final Takeaway
From a dividend perspective, should investors buy or avoid Schneider National? Schneider National has comfortably low cash and profit payout ratios, which may mean the dividend is sustainable even in the face of a sharp decline in earnings per share. Still, we consider declining earnings to be a warning sign. It might be worth researching if the company is reinvesting in growth projects that could grow earnings and dividends in the future, but for now we're not all that optimistic on its dividend prospects.
So while Schneider National looks good from a dividend perspective, it's always worthwhile being up to date with the risks involved in this stock. Case in point: We've spotted 1 warning sign for Schneider National you should be aware of.
A common investment mistake is buying the first interesting stock you see. Here you can find a list of promising dividend stocks with a greater than 2% yield and an upcoming dividend.
This article by Simply Wall St is general in nature. 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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