Unraveling Douglas Dynamics Inc's Dividend Performance and Sustainability
Exploring the Dividend History, Growth, and Future Prospects of Douglas Dynamics Inc (NYSE:PLOW)
Douglas Dynamics Inc (NYSE:PLOW) recently announced a dividend of $0.3 per share, payable on 2023-09-29, with the ex-dividend date set for 2023-09-18. As investors look forward to this upcoming payment, the spotlight also shines on the company's dividend history, yield, and growth rates. Using the data from GuruFocus, let's deep dive into Douglas Dynamics Inc's dividend performance and assess its sustainability.
Introduction to Douglas Dynamics Inc
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Douglas Dynamics Inc is a manufacturer and upfitter of commercial vehicle attachments and equipment. The Company's portfolio includes snow and ice management attachments sold under the BLIZZARD, FISHER, HENDERSON, SNOWEX and WESTERN brands, turf care equipment under the TURFEX brand and industrial maintenance equipment under the SWEEPEX brand. The Company's portfolio also includes the upfit of attachments and storage solutions under the HENDERSON brand, and the DEJANA brand and its related sub-brands. The Company also leases fifteen manufacturing and upfit and service facilities located in Iowa, Maryland, Missouri, New Jersey, New York, Ohio, Pennsylvania, and Rhode Island. The Company conducts business in two segments: Work Truck Attachments and Work Truck Solutions.
Douglas Dynamics Inc's Dividend History
Douglas Dynamics Inc has maintained a consistent dividend payment record since 2010. Dividends are currently distributed on a quarterly basis. Douglas Dynamics Inc has increased its dividend each year since 2010. The stock is thus listed as a dividend achiever, an honor that is given to companies that have increased their dividend each year for at least the past 13 years.
Examining Douglas Dynamics Inc's Dividend Yield and Growth
As of today, Douglas Dynamics Inc currently has a 12-month trailing dividend yield of 3.81% and a 12-month forward dividend yield of 3.84%. This suggests an expectation of increased dividend payments over the next 12 months. Over the past three years, Douglas Dynamics Inc's annual dividend growth rate was 2.10%. Extended to a five-year horizon, this rate increased to 3.50% per year. And over the past decade, Douglas Dynamics Inc's annual dividends per share growth rate stands at 3.90%.
Assessing Dividend Sustainability: Payout Ratio and Profitability
To assess the sustainability of the dividend, one needs to evaluate the company's payout ratio. The dividend payout ratio provides insights into the portion of earnings the company distributes as dividends. A lower ratio suggests that the company retains a significant part of its earnings, thereby ensuring the availability of funds for future growth and unexpected downturns. As of 2023-06-30, Douglas Dynamics Inc's dividend payout ratio is 0.78. This suggests that the company's dividend may not be sustainable. Douglas Dynamics Inc's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Douglas Dynamics Inc's profitability 8 out of 10 as of 2023-06-30, suggesting good profitability prospects. The company has reported net profit in 9 years out of past 10 years.
Future Outlook: Growth Metrics
To ensure the sustainability of dividends, a company must have robust growth metrics. Douglas Dynamics Inc's growth rank of 8 out of 10 suggests that the company's growth trajectory is good relative to its competitors. Revenue is the lifeblood of any company, and Douglas Dynamics Inc's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Douglas Dynamics Inc's revenue has increased by approximately 2.40% per year on average, a rate that underperforms than approximately 62.36% of global competitors. The company's 3-year EPS growth rate showcases its capability to grow its earnings, a critical component for sustaining dividends in the long run. During the past three years, Douglas Dynamics Inc's earnings increased by approximately -8.20% per year on average, a rate that underperforms than approximately 71.84% of global competitors.
Conclusion
While Douglas Dynamics Inc has a commendable dividend payment history and growth, the company's high payout ratio and underperforming revenue and EPS growth rates raise concerns about the sustainability of its dividends. Investors must carefully consider these factors before making investment decisions. GuruFocus Premium users can screen for high-dividend yield stocks using the High Dividend Yield Screener.
This article first appeared on GuruFocus.
