WSP Global's (TSE:WSP) Dividend Will Be CA$0.38

By
Simply Wall St
Published
May 17, 2022
TSX:WSP
Source: Shutterstock

WSP Global Inc.'s (TSE:WSP) investors are due to receive a payment of CA$0.38 per share on 15th of July. This means the dividend yield will be fairly typical at 1.1%.

Check out our latest analysis for WSP Global

WSP Global's Earnings Easily Cover the Distributions

While it is always good to see a solid dividend yield, we should also consider whether the payment is feasible. However, prior to this announcement, WSP Global's dividend was comfortably covered by both cash flow and earnings. This means that most of its earnings are being retained to grow the business.

The next year is set to see EPS grow by 16.6%. If the dividend continues on this path, the payout ratio could be 32% by next year, which we think can be pretty sustainable going forward.

historic-dividend
TSX:WSP Historic Dividend May 17th 2022

Dividend Volatility

The company's dividend history has been marked by instability, with at least 1 cut in the last 10 years. The first annual payment during the last 10 years was CA$2.05 in 2012, and the most recent fiscal year payment was CA$1.50. Doing the maths, this is a decline of about 3.1% per year. Generally, we don't like to see a dividend that has been declining over time as this can degrade shareholders' returns and indicate that the company may be running into problems.

The Dividend Looks Likely To Grow

With a relatively unstable dividend, it's even more important to evaluate if earnings per share is growing, which could point to a growing dividend in the future. WSP Global has impressed us by growing EPS at 14% per year over the past five years. With a decent amount of growth and a low payout ratio, we think this bodes well for WSP Global's prospects of growing its dividend payments in the future.

We Really Like WSP Global's Dividend

Overall, we like to see the dividend staying consistent, and we think WSP Global might even raise payments in the future. Distributions are quite easily covered by earnings, which are also being converted to cash flows. Taking this all into consideration, this looks like it could be a good dividend opportunity.

It's important to note that companies having a consistent dividend policy will generate greater investor confidence than those having an erratic one. However, there are other things to consider for investors when analysing stock performance. As an example, we've identified 1 warning sign for WSP Global that you should be aware of before investing. If you are a dividend investor, you might also want to look at our curated list of high yield dividend stocks.

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