Stock Analysis

Apogee Enterprises' (NASDAQ:APOG) Dividend Will Be Increased To $0.24

NasdaqGS:APOG
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Apogee Enterprises, Inc.'s (NASDAQ:APOG) dividend will be increasing from last year's payment of the same period to $0.24 on 24th of May. This will take the annual payment to 2.2% of the stock price, which is above what most companies in the industry pay.

Check out our latest analysis for Apogee Enterprises

Apogee Enterprises' Dividend Is Well Covered By Earnings

While it is great to have a strong dividend yield, we should also consider whether the payment is sustainable. However, Apogee Enterprises' earnings easily cover the dividend. This means that most of its earnings are being retained to grow the business.

EPS is set to fall by 16.9% over the next 12 months. If the dividend continues along recent trends, we estimate the payout ratio could be 26%, which we consider to be quite comfortable, with most of the company's earnings left over to grow the business in the future.

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NasdaqGS:APOG Historic Dividend April 23rd 2023

Apogee Enterprises Has A Solid Track Record

The company has an extended history of paying stable dividends. The annual payment during the last 10 years was $0.36 in 2013, and the most recent fiscal year payment was $0.96. This implies that the company grew its distributions at a yearly rate of about 10% over that duration. It is good to see that there has been strong dividend growth, and that there haven't been any cuts for a long time.

The Dividend Looks Likely To Grow

The company's investors will be pleased to have been receiving dividend income for some time. Apogee Enterprises has impressed us by growing EPS at 11% per year over the past five years. Apogee Enterprises definitely has the potential to grow its dividend in the future with earnings on an uptrend and a low payout ratio.

We Really Like Apogee Enterprises' Dividend

In summary, it is always positive to see the dividend being increased, and we are particularly pleased with its overall sustainability. The earnings easily cover the company's distributions, and the company is generating plenty of cash. We should point out that the earnings are expected to fall over the next 12 months, which won't be a problem if this doesn't become a trend, but could cause some turbulence in the next year. Taking this all into consideration, this looks like it could be a good dividend opportunity.

Companies possessing a stable dividend policy will likely enjoy greater investor interest than those suffering from a more inconsistent approach. However, there are other things to consider for investors when analysing stock performance. As an example, we've identified 1 warning sign for Apogee Enterprises 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.

Valuation is complex, but we're helping make it simple.

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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.