WisdomTree (NYSE:WT) Will Pay A Dividend Of $0.03

WisdomTree, Inc. (NYSE:WT) will pay a dividend of $0.03 on the 22nd of November. This means the annual payment will be 1.9% of the current stock price, which is lower than the industry average.

Check out our latest analysis for WisdomTree

WisdomTree's Dividend Is Well Covered By Earnings

If it is predictable over a long period, even low dividend yields can be attractive. However, prior to this announcement, WisdomTree's 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.

The next year is set to see EPS grow by 4.8%. If the dividend continues on this path, the payout ratio could be 29% by next year, which we think can be pretty sustainable going forward.

WisdomTree's Dividend Has Lacked Consistency

WisdomTree has been paying dividends for a while, but the track record isn't stellar. Due to this, we are a little bit cautious about the dividend consistency over a full economic cycle. The annual payment during the last 9 years was $0.32 in 2014, and the most recent fiscal year payment was $0.12. The dividend has fallen 63% over that period. Declining dividends isn't generally what we look for as they can indicate that the company is running into some challenges.

WisdomTree May Find It Hard To Grow The Dividend

Dividends have been going in the wrong direction, so we definitely want to see a different trend in the earnings per share. Unfortunately, WisdomTree's earnings per share has been essentially flat over the past five years, which means the dividend may not be increased each year. While growth may be thin on the ground, WisdomTree could always pay out a higher proportion of earnings to increase shareholder returns.

In Summary

In summary, we are pleased with the dividend remaining consistent, and we think there is a good chance of this continuing in the future. While the payout ratios are a good sign, we are less enthusiastic about the company's dividend record. 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. Still, investors need to consider a host of other factors, apart from dividend payments, when analysing a company. Taking the debate a bit further, we've identified 3 warning signs for WisdomTree that investors need to be conscious of moving forward. Looking for more high-yielding dividend ideas? Try our collection of strong dividend payers.

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