Logistec (TSE:LGT.B) Has Re-Affirmed Its Dividend Of CA$0.11

By
Simply Wall St
Published
May 14, 2022
TSX:LGT.B
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Logistec Corporation (TSE:LGT.B) has announced that it will pay a dividend of CA$0.11 per share on the 8th of July. The dividend yield is 1.1% based on this payment, which is a little bit low compared to the other companies in the industry.

View our latest analysis for Logistec

Logistec's Payment Has Solid Earnings Coverage

Even a low dividend yield can be attractive if it is sustained for years on end. However, prior to this announcement, Logistec'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.

Over the next year, EPS could expand by 19.2% if recent trends continue. Assuming the dividend continues along recent trends, we think the payout ratio could be 11% by next year, which is in a pretty sustainable range.

historic-dividend
TSX:LGT.B Historic Dividend May 14th 2022

Logistec Has A Solid Track Record

Even over a long history of paying dividends, the company's distributions have been remarkably stable. Since 2012, the dividend has gone from CA$0.19 to CA$0.43. This works out to be a compound annual growth rate (CAGR) of approximately 8.4% 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.

The Dividend Looks Likely To Grow

Investors who have held shares in the company for the past few years will be happy with the dividend income they have received. Logistec has impressed us by growing EPS at 19% per year over the past five years. Logistec definitely has the potential to grow its dividend in the future with earnings on an uptrend and a low payout ratio.

Logistec Looks Like A Great Dividend Stock

Overall, we think that this is a great income investment, and we think that maintaining the dividend this year may have been a conservative choice. Distributions are quite easily covered by earnings, which are also being converted to cash flows. All in all, this checks a lot of the boxes we look for when choosing an income stock.

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. For instance, we've picked out 1 warning sign for Logistec that investors should take into consideration. 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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