WD-40 Co's Dividend Analysis
An In-depth Look into WD-40 Co's Dividend Performance and Sustainability
WD-40 Co (NASDAQ:WDFC) recently announced a dividend of $0.83 per share, payable on 2023-10-31, with the ex-dividend date set for 2023-10-19. 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 WD-40 Co's dividend performance and assess its sustainability.
What Does WD-40 Co Do?
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WD-40 Co manufactures and sells lubricants and cleaning products. The firm's product categories include maintenance and cleaning products. Maintenance products include the WD-40 signature brand aerosol spray lubricant as well as degreasers, rust removers, and bicycle maintenance products. Cleaning products include toilet cleaners, carpet stain removers and deodorizers, and heavy-duty hand soaps used to clean grease. The company organizes itself into three segments based on geography: Americas, Europe/Middle East/Africa, and Asia-Pacific. Around half of the company's revenue comes from the Americas segment, which includes the United States, Canada, and Latin America.
A Glimpse at WD-40 Co's Dividend History
WD-40 Co has maintained a consistent dividend payment record since 1985. Dividends are currently distributed on a quarterly basis. WD-40 Co has increased its dividend each year since 2006. 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 17 years. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down WD-40 Co's Dividend Yield and Growth
As of today, WD-40 Co currently has a 12-month trailing dividend yield of 1.60% and a 12-month forward dividend yield of 1.63%. This suggests an expectation of increased dividend payments over the next 12 months.
Over the past three years, WD-40 Co's annual dividend growth rate was 8.90%. Extended to a five-year horizon, this rate increased to 10.00% per year. And over the past decade, WD-40 Co's annual dividends per share growth rate stands at an impressive 11.00%.
Based on WD-40 Co's dividend yield and five-year growth rate, the 5-year yield on cost of WD-40 Co stock as of today is approximately 2.58%.
The Sustainability Question: 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 2023-05-31, WD-40 Co's dividend payout ratio is 0.69.
WD-40 Co's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks WD-40 Co's profitability 9 out of 10 as of 2023-05-31, suggesting good profitability prospects. The company has reported positive net income for each of year over the past decade, further solidifying its high profitability.
Growth Metrics: The Future Outlook
To ensure the sustainability of dividends, a company must have robust growth metrics. WD-40 Co's growth rank of 9 out of 10 suggests that the company's growth trajectory is good relative to its competitors.
Revenue is the lifeblood of any company, and WD-40 Co's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. WD-40 Co's revenue has increased by approximately 7.40% per year on average, a rate that underperforms than approximately 57.72% 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, WD-40 Co's earnings increased by approximately 6.80% per year on average, a rate that underperforms than approximately 58.6% of global competitors.
Lastly, the company's 5-year EBITDA growth rate of 5.10%, which underperforms than approximately 62.8% of global competitors.
Next Steps
Considering the company's consistent dividend payments, impressive dividend growth rate, reasonable payout ratio, high profitability, and growth metrics, WD-40 Co appears to be a promising dividend stock. However, investors must also take into account the company's underperformance in revenue and earnings growth compared to global competitors. It's crucial to thoroughly research and consider all factors before making investment decisions. GuruFocus Premium users can screen for high-dividend yield stocks using the High Dividend Yield Screener.
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.
