HireQuest (NASDAQ:HQI) Is Paying Out A Dividend Of $0.06

HireQuest, Inc. (NASDAQ:HQI) has announced that it will pay a dividend of $0.06 per share on the 15th of September. This means the dividend yield will be fairly typical at 1.3%.

Check out our latest analysis for HireQuest

HireQuest's Payment Has Solid Earnings Coverage

We aren't too impressed by dividend yields unless they can be sustained over time. However, HireQuest's earnings easily cover the dividend. 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 42.6%. Assuming the dividend continues along recent trends, we think the payout ratio could be 21% by next year, which is in a pretty sustainable range.

HireQuest Doesn't Have A Long Payment History

The company has maintained a consistent dividend for a few years now, but we would like to see a longer track record before relying on it. The annual payment during the last 3 years was $0.20 in 2020, and the most recent fiscal year payment was $0.24. This works out to be a compound annual growth rate (CAGR) of approximately 6.3% a year over that time. HireQuest has been growing its dividend at a decent rate, and the payments have been stable. However, the payment history is very short, so there is no evidence yet that the dividend can be sustained over a full economic cycle.

The Dividend Looks Likely To Grow

The company's investors will be pleased to have been receiving dividend income for some time. HireQuest has seen EPS rising for the last three years, at 33% per annum. Earnings per share is growing at a solid clip, and the payout ratio is low which we think is an ideal combination in a dividend stock as the company can quite easily raise the dividend in the future.

We Really Like HireQuest's Dividend

Overall, we like to see the dividend staying consistent, and we think HireQuest might even raise payments in the future. 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 of these factors considered, we think this has solid potential as a dividend stock.

It's important to note that companies having a consistent dividend policy will generate greater investor confidence than those having an erratic one. 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 HireQuest that you should be aware of before investing. Is HireQuest not quite the opportunity you were looking for? Why not check out our selection of top dividend stocks.

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