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 $0.75 per share, payable on 2024-03-28, with the ex-dividend date set for 2024-03-14. 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 look 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 distributed on a quarterly basis. The company has increased its dividend each year since 1999, earning it the status of a dividend aristocrat, a prestigious recognition for companies that have consistently increased their dividends for at least 25 years. Below is a chart illustrating the annual Dividends Per Share for tracking historical trends.
Breaking Down Waste Management Inc's Dividend Yield and Growth
As of today, Waste Management Inc's 12-month trailing dividend yield is 1.34%, with a 12-month forward dividend yield of 1.43%, indicating anticipated dividend growth over the next year. However, the current dividend yield is near a 10-year low and underperforms 68.91% of global competitors in the Waste Management industry, which may not be as attractive to income-focused investors.
Over the past three years, Waste Management Inc's annual dividend growth rate was 8.70%. This rate decreased slightly to 8.40% over a five-year span, and the company's annual dividends per share growth rate for the past decade stands at 7.00%. Based on the dividend yield and five-year growth rate, the 5-year yield on cost for Waste Management Inc stock is approximately 2.01%.
The Sustainability Question: Payout Ratio and Profitability
The dividend payout ratio is a key indicator of dividend sustainability, showing the proportion of earnings paid out as dividends. Waste Management Inc's payout ratio is 0.45 as of 2023-12-31, implying a balance between distributing profits to shareholders and retaining earnings for growth. The company's profitability rank is 8 out of 10, indicating strong profitability prospects. Consistent positive net income over the past decade reinforces its financial stability.
Growth Metrics: The Future Outlook
Waste Management Inc's growth rank of 8 out of 10 suggests a favorable growth trajectory. Its revenue per share and 11.90% average annual 3-year revenue growth rate outperform 61.76% of global competitors. Waste Management Inc's 3-year EPS growth rate of 18.30% per year on average outperforms 64.88% of global competitors, and its 5-year EBITDA growth rate of 8.30% outperforms 39.29% of global competitors, indicating a strong capability for sustaining dividends in the long term.
Next Steps
Considering Waste Management Inc's consistent dividend payments, growth in dividend rates, prudent payout ratio, solid profitability, and robust growth metrics, the company presents a compelling case for investors seeking stable dividend income with growth potential. Investors should, however, always consider their own investment goals and the overall market environment when evaluating dividend stocks. For those seeking additional high-dividend yield opportunities, GuruFocus Premium users can leverage the High Dividend Yield Screener to discover more options.
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.
