Flowserve's (NYSE:FLS) Dividend Will Be $0.21

The board of Flowserve Corporation (NYSE:FLS) has announced that it will pay a dividend on the 11th of April, with investors receiving $0.21 per share. This payment means that the dividend yield will be 1.6%, which is around the industry average.

Flowserve's Future Dividend Projections Appear Well Covered By Earnings

While it is always good to see a solid dividend yield, we should also consider whether the payment is feasible. However, prior to this announcement, Flowserve's dividend was comfortably covered by both cash flow and earnings. As a result, a large proportion of what it earned was being reinvested back into the business.

The next year is set to see EPS grow by 85.2%. If the dividend continues along recent trends, we estimate the payout ratio will be 22%, which is in the range that makes us comfortable with the sustainability of the dividend.

See our latest analysis for Flowserve

Flowserve Has A Solid Track Record

The company has an extended history of paying stable dividends. The dividend has gone from an annual total of $0.64 in 2015 to the most recent total annual payment of $0.84. This means that it has been growing its distributions at 2.8% per annum over that time. Although we can't deny that the dividend has been remarkably stable in the past, the growth has been pretty muted.

Flowserve May Find It Hard To Grow The Dividend

Investors who have held shares in the company for the past few years will be happy with the dividend income they have received. Earnings has been rising at 3.3% per annum over the last five years, which admittedly is a bit slow. While EPS growth is quite low, Flowserve has the option to increase the payout ratio to return more cash to shareholders.

Flowserve Looks Like A Great Dividend Stock

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. Distributions are quite easily covered by earnings, which are also being converted to cash flows. All of these factors considered, we think this has solid potential as a dividend stock.

Investors generally tend to favour companies with a consistent, stable dividend policy as opposed to those operating an irregular one. Meanwhile, despite the importance of dividend payments, they are not the only factors our readers should know when assessing a company. Companies that are growing earnings tend to be the best dividend stocks over the long term. See what the 11 analysts we track are forecasting for Flowserve for free with public analyst estimates for the company. Looking for more high-yielding dividend ideas? Try our collection of strong dividend payers.

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