Wabash National's (NYSE:WNC) Dividend Will Be $0.08

Wabash National Corporation (NYSE:WNC) has announced that it will pay a dividend of $0.08 per share on the 26th of October. This means the annual payment will be 1.4% of the current stock price, which is lower than the industry average.

See our latest analysis for Wabash National

Wabash National's Earnings Easily Cover The Distributions

If it is predictable over a long period, even low dividend yields can be attractive. However, prior to this announcement, Wabash National'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.

EPS is set to fall by 20.2% over the next 12 months. Assuming the dividend continues along recent trends, we believe the payout ratio could be 10%, which we are pretty comfortable with and we think is feasible on an earnings basis.

Wabash National Doesn't Have A Long Payment History

Wabash National's dividend has been pretty stable for a little while now, but we will continue to be cautious until it has been demonstrated for a few more years. The annual payment during the last 7 years was $0.24 in 2016, and the most recent fiscal year payment was $0.32. This works out to be a compound annual growth rate (CAGR) of approximately 4.2% a year over that time. It's good to see at least some dividend growth. Yet with a relatively short dividend paying history, we wouldn't want to depend on this dividend too heavily.

The Dividend Looks Likely To Grow

Investors who have held shares in the company for the past few years will be happy with the dividend income they have received. It's encouraging to see that Wabash National has been growing its earnings per share at 16% a year over the past five years. With a decent amount of growth and a low payout ratio, we think this bodes well for Wabash National's prospects of growing its dividend payments in the future.

Wabash National Looks Like A Great Dividend Stock

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. The distributions are easily covered by earnings, and there is plenty of cash being generated as well. If earnings do fall over the next 12 months, the dividend could be buffeted a little bit, but we don't think it should cause too much of a problem in the long term. 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. Still, investors need to consider a host of other factors, apart from dividend payments, when analysing a company. To that end, Wabash National has 2 warning signs (and 1 which is concerning) we think you should know about. Is Wabash National not quite the opportunity you were looking for? Why not check out our selection of top dividend stocks.

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