SECURE Waste Infrastructure (TSE:SES) Has Affirmed Its Dividend Of CA$0.10

SECURE Waste Infrastructure Corp.'s (TSE:SES) investors are due to receive a payment of CA$0.10 per share on 15th of January. This payment means the dividend yield will be 2.3%, which is below the average for the industry.

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SECURE Waste Infrastructure's Future Dividend Projections Appear Well Covered By Earnings

If it is predictable over a long period, even low dividend yields can be attractive. Prior to this announcement, SECURE Waste Infrastructure was paying out 88% of earnings and more than 75% of free cash flows. This indicates that the company is more focused on returning cash to shareholders than growing the business, but it is still in a reasonable range to continue with.

Over the next year, EPS is forecast to expand by 173.0%. Under the assumption that the dividend will continue along recent trends, we think the payout ratio could be 32% which would be quite comfortable going to take the dividend forward.

View our latest analysis for SECURE Waste Infrastructure

SECURE Waste Infrastructure Has A Solid Track Record

The company has a sustained record of paying dividends with very little fluctuation. Since 2015, the dividend has gone from CA$0.24 total annually to CA$0.40. This works out to be a compound annual growth rate (CAGR) of approximately 5.2% a year over that time. The dividend has been growing very nicely for a number of years, and has given its shareholders some nice income in their portfolios.

SECURE Waste Infrastructure Might Find It Hard To Grow Its Dividend

Some investors will be chomping at the bit to buy some of the company's stock based on its dividend history. SECURE Waste Infrastructure has impressed us by growing EPS at 58% per year over the past five years. Earnings per share is growing nicely, but the company is paying out most of its earnings as dividends. This might be sustainable, but we wonder why SECURE Waste Infrastructure is not retaining those earnings to reinvest in growth.

Our Thoughts On SECURE Waste Infrastructure's Dividend

Overall, we don't think this company makes a great dividend stock, even though the dividend wasn't cut this year. We can't deny that the payments have been very stable, but we are a little bit worried about the very high payout ratio. We don't think SECURE Waste Infrastructure is a great stock to add to your portfolio if income is your focus.

Market movements attest to how highly valued a consistent dividend policy is compared to one which is more unpredictable. However, there are other things to consider for investors when analysing stock performance. As an example, we've identified 2 warning signs for SECURE Waste Infrastructure 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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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.