The board of Standex International Corporation (NYSE:SXI) has announced that it will pay a dividend on the 23rd of May, with investors receiving $0.32 per share. Even though the dividend went up, the yield is still quite low at only 0.8%.
Our free stock report includes 3 warning signs investors should be aware of before investing in Standex International. Read for free now.Standex International's Projected Earnings Seem Likely To Cover Future Distributions
The dividend yield is a little bit low, but sustainability of the payments is also an important part of evaluating an income stock. However, prior to this announcement, Standex International's dividend was comfortably covered by both cash flow and earnings. This means that most of what the business earns is being used to help it grow.
The next year is set to see EPS grow by 30.7%. If the dividend continues on this path, the payout ratio could be 21% by next year, which we think can be pretty sustainable going forward.
Check out our latest analysis for Standex International
Standex International Has A Solid Track Record
The company has been paying a dividend for a long time, and it has been quite stable which gives us confidence in the future dividend potential. Since 2015, the dividend has gone from $0.40 total annually to $1.28. This works out to be a compound annual growth rate (CAGR) of approximately 12% a year over that time. We can see that payments have shown some very nice upward momentum without faltering, which provides some reassurance that future payments will also be reliable.
Standex International Could Grow Its Dividend
Investors could be attracted to the stock based on the quality of its payment history. We are encouraged to see that Standex International has grown earnings per share at 5.5% per year over the past five years. Standex International definitely has the potential to grow its dividend in the future with earnings on an uptrend and a low payout ratio.
Standex International Looks Like A Great Dividend Stock
Overall, we think this could be an attractive income stock, and it is only getting better by paying a higher dividend this year. Distributions are quite easily covered by earnings, which are also being converted to cash flows. All of these factors considered, we think this has solid potential as a dividend stock.
Investors generally tend to favour companies with a consistent, stable dividend policy as opposed to those operating an irregular one. At the same time, there are other factors our readers should be conscious of before pouring capital into a stock. For example, we've identified 3 warning signs for Standex International (1 is concerning!) that you should be aware of before investing. Is Standex International not quite the opportunity you were looking for? Why not check out our selection of top dividend stocks.
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