The board of Dover Corporation (NYSE:DOV) has announced that it will pay a dividend of $0.51 per share on the 15th of December. Based on this payment, the dividend yield will be 1.5%, which is fairly typical for the industry.
Check out our latest analysis for Dover
Dover's Earnings Easily Cover The Distributions
Unless the payments are sustainable, the dividend yield doesn't mean too much. However, Dover's earnings easily cover the dividend. This means that most of what the business earns is being used to help it grow.
Over the next year, EPS is forecast to expand by 43.9%. If the dividend continues along recent trends, we estimate the payout ratio will be 20%, which is in the range that makes us comfortable with the sustainability of the dividend.
Dover Has A Solid Track Record
Even over a long history of paying dividends, the company's distributions have been remarkably stable. Since 2013, the dividend has gone from $1.40 total annually to $2.04. This works out to be a compound annual growth rate (CAGR) of approximately 3.8% a year over that time. Although we can't deny that the dividend has been remarkably stable in the past, the growth has been pretty muted.
We Could See Dover's Dividend Growing
The company's investors will be pleased to have been receiving dividend income for some time. We are encouraged to see that Dover has grown earnings per share at 9.1% per year over the past five years. With a decent amount of growth and a low payout ratio, we think this bodes well for Dover's prospects of growing its dividend payments in the future.
We Really Like Dover's Dividend
Overall, we like to see the dividend staying consistent, and we think Dover might even raise payments in the future. Earnings are easily covering distributions, and the company is generating plenty of cash. Taking this all into consideration, this looks like it could be a good dividend opportunity.
Market movements attest to how highly valued a consistent dividend policy is compared to one which is more unpredictable. Still, investors need to consider a host of other factors, apart from dividend payments, when analysing a company. As an example, we've identified 1 warning sign for Dover that you should be aware of before investing. Is Dover 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.
About NYSE:DOV
Dover
Provides equipment and components, consumable supplies, aftermarket parts, software and digital solutions, and support services worldwide.
Solid track record, good value and pays a dividend.
