The board of Rocky Brands, Inc. (NASDAQ:RCKY) has announced that it will pay a dividend of $0.155 per share on the 17th of September. The dividend yield will be 2.1% based on this payment which is still above the industry average.
See our latest analysis for Rocky Brands
Rocky Brands' Payment Has Solid Earnings Coverage
If the payments aren't sustainable, a high yield for a few years won't matter that much. Before making this announcement, Rocky Brands was easily earning enough to cover the dividend. This means that most of what the business earns is being used to help it grow.
Looking forward, EPS could fall by 0.9% if the company can't turn things around from the last few years. Assuming the dividend continues along recent trends, we believe the payout ratio could be 33%, which we are pretty comfortable with and we think is feasible on an earnings basis.
Rocky Brands Has A Solid Track Record
The company has an extended history of paying stable dividends. Since 2014, the dividend has gone from $0.40 total annually to $0.62. This means that it has been growing its distributions at 4.5% 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.
Dividend Growth May Be Hard To Achieve
Investors could be attracted to the stock based on the quality of its payment history. However, initial appearances might be deceiving. Rocky Brands hasn't seen much change in its earnings per share over the last five years.
Our Thoughts On Rocky Brands' Dividend
Overall, a consistent dividend is a good thing, and we think that Rocky Brands has the ability to continue this into the future. While the payments look sustainable for now, earnings have been shrinking so the dividend could come under pressure in the future. The dividend looks okay, but there have been some issues in the past, so we would be a little bit cautious.
It's important to note that companies having a consistent dividend policy will generate greater investor confidence than those having an erratic one. Meanwhile, despite the importance of dividend payments, they are not the only factors our readers should know when assessing a company. To that end, Rocky Brands has 3 warning signs (and 2 which are significant) we think you should know about. Is Rocky Brands not quite the opportunity you were looking for? Why not check out our selection of top dividend stocks.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
About NasdaqGS:RCKY
Rocky Brands
Designs, manufactures, and markets footwear and apparel in the United States, Canada, and internationally.
Established dividend payer and good value.
