Fortune Brands Innovations (NYSE:FBIN) Is Paying Out A Dividend Of $0.24

Fortune Brands Innovations, Inc. (NYSE:FBIN) will pay a dividend of $0.24 on the 11th of December. Including this payment, the dividend yield on the stock will be 1.1%, which is a modest boost for shareholders' returns.

View our latest analysis for Fortune Brands Innovations

Fortune Brands Innovations' Projected Earnings Seem Likely To Cover Future Distributions

Even a low dividend yield can be attractive if it is sustained for years on end. However, prior to this announcement, Fortune Brands Innovations' dividend was comfortably covered by both cash flow and earnings. This means that most of what the business earns is being used to help it grow.

The next year is set to see EPS grow by 60.8%. Assuming the dividend continues along recent trends, we think the payout ratio could be 18% by next year, which is in a pretty sustainable range.

Fortune Brands Innovations Has A Solid Track Record

The company has an extended history of paying stable dividends. The annual payment during the last 10 years was $0.48 in 2014, and the most recent fiscal year payment was $0.93. This works out to be a compound annual growth rate (CAGR) of approximately 6.8% 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.

Fortune Brands Innovations May Find It Hard To Grow The Dividend

Investors could be attracted to the stock based on the quality of its payment history. Earnings per share has been crawling upwards at 4.6% per year. While growth may be thin on the ground, Fortune Brands Innovations could always pay out a higher proportion of earnings to increase shareholder returns.

We Really Like Fortune Brands Innovations' Dividend

In summary, it is good to see that the dividend is staying consistent, and we don't think there is any reason to suspect this might change over the medium term. The company is easily earning enough to cover its dividend payments and it is great to see that these earnings are being translated into cash flow. All in all, this checks a lot of the boxes we look for when choosing an income stock.

Market movements attest to how highly valued a consistent dividend policy is compared to one which is more unpredictable. At the same time, there are other factors our readers should be conscious of before pouring capital into a stock. As an example, we've identified 1 warning sign for Fortune Brands Innovations 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.

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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.