Steven Madden (NASDAQ:SHOO) Is Paying Out A Dividend Of $0.21

Steven Madden, Ltd. (NASDAQ:SHOO) will pay a dividend of $0.21 on the 23rd of September. This means the dividend yield will be fairly typical at 1.9%.

See our latest analysis for Steven Madden

Steven Madden's Payment Has Solid Earnings Coverage

We aren't too impressed by dividend yields unless they can be sustained over time. However, Steven Madden's earnings easily cover the dividend. This means that most of its earnings are being retained to grow the business.

The next year is set to see EPS grow by 57.6%. If the dividend continues on this path, the payout ratio could be 25% by next year, which we think can be pretty sustainable going forward.

Steven Madden's Dividend Has Lacked Consistency

It's comforting to see that Steven Madden has been paying a dividend for a number of years now, however it has been cut at least once in that time. If the company cuts once, it definitely isn't argument against the possibility of it cutting in the future. The annual payment during the last 6 years was $0.533 in 2018, and the most recent fiscal year payment was $0.84. This works out to be a compound annual growth rate (CAGR) of approximately 7.9% a year over that time. It's good to see the dividend growing at a decent rate, but the dividend has been cut at least once in the past. Steven Madden might have put its house in order since then, but we remain cautious.

We Could See Steven Madden's Dividend Growing

With a relatively unstable dividend, it's even more important to see if earnings per share is growing. Steven Madden has impressed us by growing EPS at 7.5% per year over the past five years. Steven Madden definitely has the potential to grow its dividend in the future with earnings on an uptrend and a low payout ratio.

In Summary

Overall, we think Steven Madden is a solid choice as a dividend stock, even though the dividend wasn't raised this year. The payout ratio looks good, but unfortunately the company's dividend track record isn't stellar. This looks like it could be a good dividend stock going forward, but we would note that the payout ratio has been at higher levels in the past so it could happen again.

It's important to note that companies having a consistent dividend policy will generate greater investor confidence than those having an erratic one. However, there are other things to consider for investors when analysing stock performance. For instance, we've picked out 2 warning signs for Steven Madden that investors should take into consideration. If you are a dividend investor, you might also want to look at our curated list of high yield 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.