An analysis of the company's dividend history, yield, growth and sustainability
Werner Enterprises Inc(WERN, Financial) recently announced a dividend of $0.14 per share, payable on 2023-10-18, with the ex-dividend date set for 2023-09-29. 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 Werner Enterprises Incs dividend performance and assess its sustainability.
Understanding Werner Enterprises Inc
Werner Enterprises Inc ranks among the top five full-truckload carriers by revenue, with a fleet of more than 7,800 tractors, including owner-operators. The company has two reportable segments - TTS and Werner Logistics. It derives about 80% of its top line from a wide array of full-truckload shipping services (including dedicated contract carriage; roughly 20% comes from non-asset based logistics operations, including truck brokerage.
Werner Enterprises Inc's Dividend History
Werner Enterprises Inc has maintained a consistent dividend payment record since 1987. Dividends are currently distributed on a quarterly basis. Werner Enterprises 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.
Below is a chart showing annual Dividends Per Share for tracking historical trends.
Werner Enterprises Inc's Dividend Yield and Growth
As of today, Werner Enterprises Inc currently has a 12-month trailing dividend yield of 1.37% and a 12-month forward dividend yield of 1.46%. This suggests an expectation of increase dividend payments over the next 12 months.
Werner Enterprises Inc's dividend yield of 1.37% is near a 10-year high and outperforms than 24.31 of global competitors in the Transportation industry, suggesting that the company's dividend yield stands out as an attractive proposition for income investors.
Over the past three years, Werner Enterprises Inc's annual dividend growth rate was 12.30%. Extended to a five-year horizon, this rate increased to 12.40% per year. And over the past decade, Werner Enterprises Inc's annual dividends per share growth rate stands at an impressive 10.60%.
Based on Werner Enterprises Inc's dividend yield and five-year growth rate, the 5-year yield on cost of Werner Enterprises Inc stock as of today is approximately 2.46%.
Assessing Werner Enterprises Inc's Dividend Sustainability
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, Werner Enterprises Inc's dividend payout ratio is 0.19.
Werner Enterprises Inc's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Werner Enterprises Inc's profitability 8 out of 10 as of 2023-06-30, suggesting good profitability prospects. The company has reported positive net income for each of year over the past decade, further solidifying its high profitability.
Werner Enterprises Inc's Growth Metrics
To ensure the sustainability of dividends, a company must have robust growth metrics. Werner Enterprises 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 Werner Enterprises Inc's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Werner Enterprises Inc's revenue has increased by approximately 13.10% per year on average, a rate that outperforms than approximately 68.56% 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, Werner Enterprises Inc's earnings increased by approximately 16.30% per year on average, a rate that outperforms than approximately 53.32% of global competitors.
Lastly, the company's 5-year EBITDA growth rate of 8.80%, which outperforms than approximately 53.35% of global competitors.
Conclusion
With a consistent dividend payment record, an impressive growth rate, a sustainable payout ratio, and strong profitability, Werner Enterprises Inc appears to be a solid dividend stock. The company's strong growth metrics further enhance its appeal, suggesting a promising future for its dividend payments. However, as with any investment, it's crucial for investors to conduct their due diligence and consider their financial goals and risk tolerance before investing.
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