Weis Markets (NYSE:WMK) Is Paying Out A Dividend Of $0.34

The board of Weis Markets, Inc. (NYSE:WMK) has announced that it will pay a dividend on the 26th of November, with investors receiving $0.34 per share. This makes the dividend yield 2.1%, which will augment investor returns quite nicely.

View our latest analysis for Weis Markets

Weis Markets' Future Dividend Projections Appear Well Covered By Earnings

We like to see robust dividend yields, but that doesn't matter if the payment isn't sustainable. However, prior to this announcement, Weis Markets' dividend was comfortably covered by both cash flow and earnings. This means that most of its earnings are being retained to grow the business.

Looking forward, earnings per share could rise by 8.4% over the next year if the trend from the last few years continues. If the dividend continues on this path, the payout ratio could be 37% by next year, which we think can be pretty sustainable going forward.

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 2014 to the most recent total annual payment of $1.36. This means that it has been growing its distributions at 1.3% 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.

The Dividend Has Growth Potential

The company's investors will be pleased to have been receiving dividend income for some time. Weis Markets has seen EPS rising for the last five years, at 8.4% per annum. Weis Markets definitely has the potential to grow its dividend in the future with earnings on an uptrend and a low payout ratio.

Weis Markets Looks Like A Great Dividend Stock

Overall, we think that this is a great income investment, and we think that maintaining the dividend this year may have been a conservative choice. 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. See if management have their own wealth at stake, by checking insider shareholdings in Weis Markets stock. Is Weis Markets not quite the opportunity you were looking for? Why not check out our selection of top dividend stocks.

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