Waste Management Inc's Dividend Analysis
Assessing the Sustainability and Growth of Waste Management Inc's Dividends
Waste Management Inc (NYSE:WM) recently announced a dividend of $0.7 per share, payable on 2023-12-15, with the ex-dividend date set for 2023-11-30. 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 delve into Waste Management Inc's dividend performance and assess its sustainability.
What Does Waste Management Inc Do?
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Waste Management Inc is the largest integrated provider of traditional solid waste services in the United States, operating 259 active landfills and about 337 transfer stations. The company serves residential, commercial, and industrial end markets and is also a leading recycler in North America.
A Glimpse at Waste Management Inc's Dividend History
Waste Management Inc has maintained a consistent dividend payment record since 1998, with dividends currently being distributed on a quarterly basis. The company has increased its dividend each year since 1999, earning it the status of a dividend achievera title given to companies that have increased their dividend annually for at least the past 24 years. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Waste Management Inc's Dividend Yield and Growth
As of today, Waste Management Inc boasts a 12-month trailing dividend yield of 1.64% and a 12-month forward dividend yield of 1.67%, indicating an expectation of increased dividend payments over the next 12 months. Over the past three years, the company's annual dividend growth rate was 8.20%, which rose to 8.40% over a five-year period, and stood at 6.20% over the past decade. Waste Management Inc's 5-year yield on cost is approximately 2.45% as of today.
The Sustainability Question: Payout Ratio and Profitability
The dividend payout ratio is crucial for assessing dividend sustainability, as it indicates the proportion of earnings distributed as dividends. A lower ratio suggests a company retains more earnings for future growth and downturns. Waste Management Inc's dividend payout ratio is 0.49 as of 2023-09-30. The company's profitability rank is 8 out of 10 as of the same date, reflecting good profitability prospects. Waste Management Inc has reported positive net income annually for the past decade, reinforcing its financial stability.
Growth Metrics: The Future Outlook
Waste Management Inc's growth rank of 8 out of 10 suggests a positive growth trajectory. The company's revenue per share and 3-year revenue growth rate indicate a strong revenue model, with a 9.50% average annual increase that outperforms approximately 57.64% of global competitors. Waste Management Inc's 3-year EPS growth rate of 9.80% per year on average outperforms about 51.52% of global competitors. Furthermore, the 5-year EBITDA growth rate of 3.60% outperforms approximately 29.57% of global competitors.
Concluding Thoughts on Waste Management Inc's Dividend Stability
In conclusion, Waste Management Inc's consistent dividend growth, reasonable payout ratio, solid profitability, and positive growth metrics paint a promising picture for dividend sustainability and potential growth. Investors considering Waste Management Inc for its dividend prospects may find reassurance in the company's strong track record and financial health. As the waste management industry evolves with environmental concerns and technological advancements, Waste Management Inc seems well-positioned to maintain its dividend commitments while navigating future opportunities and challenges. Will Waste Management Inc continue to be a reliable source of dividends for value investors? Only time will tell, but the current indicators are certainly encouraging.
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This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
This article first appeared on GuruFocus.
