Oshkosh (NYSE:OSK) Is Paying Out A Larger Dividend Than Last Year

Oshkosh Corporation (NYSE:OSK) will increase its dividend from last year's comparable payment on the 3rd of March to $0.51. This takes the annual payment to 1.8% of the current stock price, which is about average for the industry.

See our latest analysis for Oshkosh

Oshkosh's Payment Could Potentially Have Solid Earnings Coverage

Unless the payments are sustainable, the dividend yield doesn't mean too much. However, prior to this announcement, Oshkosh's dividend was comfortably covered by both cash flow and earnings. This means that most of its earnings are being retained to grow the business.

The next year is set to see EPS grow by 25.7%. If the dividend continues along recent trends, we estimate the payout ratio will be 16%, which is in the range that makes us comfortable with the sustainability of the dividend.

Oshkosh Has A Solid Track Record

The company has an extended history of paying stable dividends. The annual payment during the last 10 years was $0.60 in 2015, and the most recent fiscal year payment was $2.04. This means that it has been growing its distributions at 13% per annum over that time. It is good to see that there has been strong dividend growth, and that there haven't been any cuts for a long time.

We Could See Oshkosh's Dividend Growing

Investors could be attracted to the stock based on the quality of its payment history. Oshkosh has seen EPS rising for the last five years, at 5.8% per annum. With a decent amount of growth and a low payout ratio, we think this bodes well for Oshkosh's prospects of growing its dividend payments in the future.

Oshkosh Looks Like A Great Dividend Stock

In summary, it is always positive to see the dividend being increased, and we are particularly pleased with its overall sustainability. 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.

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. Companies that are growing earnings tend to be the best dividend stocks over the long term. See what the 13 analysts we track are forecasting for Oshkosh 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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