Assessing the Sustainability of Werner Enterprises Inc's Upcoming Dividend
Werner Enterprises Inc (WERN, Financial) recently announced a dividend of $0.14 per share, payable on 2024-01-17, with the ex-dividend date set for 2023-12-29. 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 look into Werner Enterprises Inc's dividend performance and assess its sustainability.
What Does Werner Enterprises Inc Do?
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.
A Glimpse at 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.
Breaking Down Werner Enterprises Inc's Dividend Yield and Growth
As of today, Werner Enterprises Inc currently has a 12-month trailing dividend yield of 1.25% and a 12-month forward dividend yield of 1.31%. This suggests an expectation of increased dividend payments over the next 12 months. 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 2.24%.
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 2023-09-30, Werner Enterprises Inc's dividend payout ratio is 0.23.
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 2023-09-30, suggesting good profitability prospects. The company has reported positive net income for each of year over the past decade, further solidifying its high profitability.
Growth Metrics: The Future Outlook
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 approximately 68.19% 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 14.80% per year on average, a rate that outperforms approximately 53.44% of global competitors.
Lastly, the company's 5-year EBITDA growth rate of 7.10%, which outperforms approximately 47.15% of global competitors.
Engaging Conclusion: Werner Enterprises Inc's Dividend Outlook
In conclusion, Werner Enterprises Inc's upcoming dividend, consistent growth in dividend payments, and a prudent payout ratio, combined with strong profitability and growth metrics, paint a positive picture for the company's dividend sustainability. These factors are crucial for value investors who prioritize steady income and long-term investment stability. Will Werner Enterprises Inc continue its trajectory as a dividend achiever, and how will its growth strategies support this path? Only time will tell, but the current indicators are promising. For those seeking to expand their portfolio with high-dividend yield stocks, the High Dividend Yield Screener available to GuruFocus Premium users could be an invaluable tool.
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.
