UFP Industries (NASDAQ:UFPI) Has Announced That It Will Be Increasing Its Dividend To $0.33
UFP Industries, Inc.'s (NASDAQ:UFPI) dividend will be increasing from last year's payment of the same period to $0.33 on 15th of March. The payment will take the dividend yield to 1.1%, which is in line with the average for the industry.
View our latest analysis for UFP Industries
UFP Industries' Payment Has Solid Earnings Coverage
We like a dividend to be consistent over the long term, so checking whether it is sustainable is important. However, UFP Industries' earnings easily cover the dividend. As a result, a large proportion of what it earned was being reinvested back into the business.
Over the next year, EPS is forecast to expand by 0.7%. If the dividend continues along recent trends, we estimate the payout ratio will be 17%, which is in the range that makes us comfortable with the sustainability of the dividend.
UFP Industries Has A Solid Track Record
Even over a long history of paying dividends, the company's distributions have been remarkably stable. Since 2014, the dividend has gone from $0.133 total annually to $1.32. This works out to be a compound annual growth rate (CAGR) of approximately 26% a year over that time. We can see that payments have shown some very nice upward momentum without faltering, which provides some reassurance that future payments will also be reliable.
The Dividend Looks Likely To Grow
The company's investors will be pleased to have been receiving dividend income for some time. UFP Industries has impressed us by growing EPS 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 UFP Industries' Dividend
In summary, it is always positive to see the dividend being increased, and we are particularly pleased with its overall sustainability. Earnings are easily covering distributions, and the company is generating plenty of cash. All of these factors considered, we think this has solid potential as a dividend stock.
Market movements attest to how highly valued a consistent dividend policy is compared to one which is more unpredictable. Meanwhile, despite the importance of dividend payments, they are not the only factors our readers should know when assessing a company. Earnings growth generally bodes well for the future value of company dividend payments. See if the 6 UFP Industries analysts we track are forecasting continued growth with our free report on analyst estimates for the company. Is UFP Industries not quite the opportunity you were looking for? Why not check out our selection of top dividend stocks.
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