Wolverine World Wide (NYSE:WWW) Is Paying Out A Dividend Of $0.10
Wolverine World Wide, Inc.'s (NYSE:WWW) investors are due to receive a payment of $0.10 per share on 1st of November. This means the annual payment is 3.2% of the current stock price, which is above the average for the industry.
View our latest analysis for Wolverine World Wide
Wolverine World Wide's Dividend Is Well Covered By Earnings
A big dividend yield for a few years doesn't mean much if it can't be sustained. Even in the absence of profits, Wolverine World Wide is paying a dividend. Along with this, it is also not generating free cash flows, which raises concerns about the sustainability of the dividend.
According to analysts, EPS should be several times higher next year. If the dividend extends its recent trend, estimates say the dividend could reach 5.7%, which we would be comfortable to see continuing.
Wolverine World Wide Has A Solid Track Record
The company has an extended history of paying stable dividends. The annual payment during the last 10 years was $0.24 in 2013, and the most recent fiscal year payment was $0.40. This works out to be a compound annual growth rate (CAGR) of approximately 5.2% a year over that time. Dividends have grown at a reasonable rate over this period, and without any major cuts in the payment over time, we think this is an attractive combination as it provides a nice boost to shareholder returns.
The Dividend Has Limited Growth Potential
Investors could be attracted to the stock based on the quality of its payment history. However, things aren't all that rosy. Wolverine World Wide's EPS has fallen by approximately 36% per year during the past five years. A sharp decline in earnings per share is not great from from a dividend perspective. Even conservative payout ratios can come under pressure if earnings fall far enough. However, the next year is actually looking up, with earnings set to rise. We would just wait until it becomes a pattern before getting too excited.
Wolverine World Wide's Dividend Doesn't Look Sustainable
Overall, it's nice to see a consistent dividend payment, but we think that longer term, the current level of payment might be unsustainable. Although they have been consistent in the past, we think the payments are a little high to be sustained. This company is not in the top tier of income providing stocks.
Investors generally tend to favour companies with a consistent, stable dividend policy as opposed to those operating an irregular one. Meanwhile, despite the importance of dividend payments, they are not the only factors our readers should know when assessing a company. For example, we've picked out 2 warning signs for Wolverine World Wide that investors should know about before committing capital to this stock. Looking for more high-yielding dividend ideas? Try our collection of strong dividend payers.
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