Stock Analysis

Apogee Enterprises (NASDAQ:APOG) Is Increasing Its Dividend To $0.24

NasdaqGS:APOG
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Apogee Enterprises, Inc. (NASDAQ:APOG) has announced that it will be increasing its dividend from last year's comparable payment on the 24th of May to $0.24. This makes the dividend yield 2.4%, which is above the industry average.

Check out our latest analysis for Apogee Enterprises

Apogee Enterprises' Payment Has Solid Earnings Coverage

A big dividend yield for a few years doesn't mean much if it can't be sustained. However, Apogee Enterprises' earnings easily cover the dividend. This means that most of what the business earns is being used to help it grow.

Looking forward, earnings per share is forecast to fall by 16.9% over the next year. Assuming the dividend continues along recent trends, we believe the payout ratio could be 26%, which we are pretty comfortable with and we think is feasible on an earnings basis.

historic-dividend
NasdaqGS:APOG Historic Dividend May 7th 2023

Apogee Enterprises Has A Solid Track Record

The company has an extended history of paying stable dividends. Since 2013, the dividend has gone from $0.36 total annually to $0.96. This means that it has been growing its distributions at 10% per annum 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.

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. Growth in EPS bodes well for the dividend, as does the low payout ratio that the company is currently reporting.

Apogee Enterprises 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. The distributions are easily covered by earnings, and there is plenty of cash being generated as well. However, it is worth noting that the earnings are expected to fall over the next year, which may not change the long term outlook, but could affect the dividend payment in the next 12 months. 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. At the same time, there are other factors our readers should be conscious of before pouring capital into a stock. To that end, Apogee Enterprises has 2 warning signs (and 1 which makes us a bit uncomfortable) we think you should know about. Is Apogee Enterprises not quite the opportunity you were looking for? Why not check out our selection of top 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.