H&E Equipment Services' (NASDAQ:HEES) Dividend Will Be $0.275

H&E Equipment Services, Inc. (NASDAQ:HEES) will pay a dividend of $0.275 on the 13th of December. This makes the dividend yield 2.0%, which will augment investor returns quite nicely.

See our latest analysis for H&E Equipment Services

H&E Equipment Services' Future Dividend Projections Appear Well Covered By Earnings

We like to see robust dividend yields, but that doesn't matter if the payment isn't sustainable. However, H&E Equipment Services' earnings easily cover the dividend. As a result, a large proportion of what it earned was being reinvested back into the business.

Over the next year, EPS is forecast to expand by 6.1%. If the dividend continues along recent trends, we estimate the payout ratio will be 27%, which is in the range that makes us comfortable with the sustainability of the dividend.

H&E Equipment Services Has A Solid Track Record

The company has been paying a dividend for a long time, and it has been quite stable which gives us confidence in the future dividend potential. The annual payment during the last 10 years was $1.00 in 2014, and the most recent fiscal year payment was $1.10. Its dividends have grown at less than 1% per annum over this time frame. Slow and steady dividend growth might not sound that exciting, but dividends have been stable for ten years, which we think makes this a fairly attractive offer.

We Could See H&E Equipment Services' Dividend Growing

Investors could be attracted to the stock based on the quality of its payment history. We are encouraged to see that H&E Equipment Services has grown earnings per share at 9.6% per year over the past five years. H&E Equipment Services definitely has the potential to grow its dividend in the future with earnings on an uptrend and a low payout ratio.

We Really Like H&E Equipment Services' Dividend

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. Earnings are easily covering distributions, and the company is generating plenty of cash. All of these factors considered, we think this has solid potential as a dividend stock.

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 H&E Equipment Services that you should be aware of before investing. Is H&E Equipment Services 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.