Andersons (NASDAQ:ANDE) Will Pay A Dividend Of $0.19

The Andersons, Inc.'s (NASDAQ:ANDE) investors are due to receive a payment of $0.19 per share on 22nd of October. Based on this payment, the dividend yield will be 1.6%, which is fairly typical for the industry.

Check out our latest analysis for Andersons

Andersons' Payment Has Solid Earnings Coverage

Solid dividend yields are great, but they only really help us if the payment is sustainable. However, prior to this announcement, Andersons' dividend was comfortably covered by both cash flow and earnings. This means that most of what the business earns is being used to help it grow.

Looking forward, earnings per share could rise by 19.6% over the next year if the trend from the last few years continues. Assuming the dividend continues along recent trends, we think the payout ratio could be 22% by next year, which is in a pretty sustainable range.

Andersons Has A Solid Track Record

The company has been paying a dividend for a long time, and it has been quite stable which gives us confidence in the future dividend potential. Since 2014, the annual payment back then was $0.427, compared to the most recent full-year payment of $0.76. This works out to be a compound annual growth rate (CAGR) of approximately 5.9% a year over that time. Dividends have grown at a reasonable rate over this period, and without any major cuts in the payment over time, we think this is an attractive combination as it provides a nice boost to shareholder returns.

The Dividend Looks Likely To Grow

The company's investors will be pleased to have been receiving dividend income for some time. Andersons has seen EPS rising for the last five years, at 20% per annum. With a decent amount of growth and a low payout ratio, we think this bodes well for Andersons' prospects of growing its dividend payments in the future.

We Really Like Andersons' Dividend

Overall, we like to see the dividend staying consistent, and we think Andersons might even raise payments in the future. 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.

Investors generally tend to favour companies with a consistent, stable dividend policy as opposed to those operating an irregular one. Meanwhile, despite the importance of dividend payments, they are not the only factors our readers should know when assessing a company. Now, if you want to look closer, it would be worth checking out our free research on Andersons management tenure, salary, and performance. Is Andersons not quite the opportunity you were looking for? Why not check out our selection of top dividend stocks.

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