Hillenbrand's (NYSE:HI) Dividend Will Be $0.2175

Hillenbrand, Inc.'s (NYSE:HI) investors are due to receive a payment of $0.2175 per share on 30th of September. This means that the annual payment will be 2.1% of the current stock price, which is in line with the average for the industry.

View our latest analysis for Hillenbrand

Hillenbrand's Payment Has Solid Earnings Coverage

We like a dividend to be consistent over the long term, so checking whether it is sustainable is important. However, prior to this announcement, Hillenbrand'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 36.3%. 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.

Hillenbrand 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 dividend has gone from an annual total of $0.77 in 2012 to the most recent total annual payment of $0.87. This implies that the company grew its distributions at a yearly rate of about 1.2% over that duration. While the consistency in the dividend payments is impressive, we think the relatively slow rate of growth is less attractive.

Hillenbrand Could Grow Its Dividend

Investors who have held shares in the company for the past few years will be happy with the dividend income they have received. Hillenbrand has seen EPS rising for the last five years, at 8.8% per annum. With a decent amount of growth and a low payout ratio, we think this bodes well for Hillenbrand's prospects of growing its dividend payments in the future.

We Really Like Hillenbrand's 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. Distributions are quite easily covered by earnings, which are also being converted to cash flows. All in all, this checks a lot of the boxes we look for when choosing an income stock.

Companies possessing a stable dividend policy will likely enjoy greater investor interest than those suffering from a more inconsistent approach. Meanwhile, despite the importance of dividend payments, they are not the only factors our readers should know when assessing a company. For instance, we've picked out 1 warning sign for Hillenbrand that investors should take into consideration. Is Hillenbrand not quite the opportunity you were looking for? Why not check out our selection of top dividend stocks.

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