Weis Markets (NYSE:WMK) Has Announced That It Will Be Increasing Its Dividend To $0.34

Weis Markets, Inc. (NYSE:WMK) has announced that it will be increasing its periodic dividend on the 21st of November to $0.34, which will be 6.3% higher than last year's comparable payment amount of $0.32. The payment will take the dividend yield to 1.4%, which is in line with the average for the industry.

Check out our latest analysis for Weis Markets

Weis Markets' Payment Has Solid Earnings Coverage

Solid dividend yields are great, but they only really help us if the payment is sustainable. However, Weis Markets' earnings easily cover the dividend. This means that most of what the business earns is being used to help it grow.

If the trend of the last few years continues, EPS will grow by 7.7% over the next 12 months. If the dividend continues along recent trends, we estimate the payout ratio will be 28%, which is in the range that makes us comfortable with the sustainability of the dividend.

Weis Markets Has A Solid Track Record

The company has a sustained record of paying dividends with very little fluctuation. The dividend has gone from an annual total of $1.20 in 2012 to the most recent total annual payment of $1.28. Dividend payments have been growing, but very slowly over the period. While the consistency in the dividend payments is impressive, we think the relatively slow rate of growth is less attractive.

The Dividend Has Growth Potential

The company's investors will be pleased to have been receiving dividend income for some time. Weis Markets has impressed us by growing EPS at 7.7% per year over the past five years. With a decent amount of growth and a low payout ratio, we think this bodes well for Weis Markets' prospects of growing its dividend payments in the future.

Weis Markets Looks Like A Great Dividend Stock

Overall, a dividend increase is always good, and we think that Weis Markets is a strong income stock thanks to its track record and growing earnings. Earnings are easily covering distributions, and the company is generating plenty of cash. Taking this all into consideration, this looks like it could be a good dividend opportunity.

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. Now, if you want to look closer, it would be worth checking out our free research on Weis Markets management tenure, salary, and performance. Looking for more high-yielding dividend ideas? Try our collection of strong dividend payers.

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