Edgewell Personal Care (NYSE:EPC) Is Due To Pay A Dividend Of $0.15

The board of Edgewell Personal Care Company (NYSE:EPC) has announced that it will pay a dividend on the 4th of April, with investors receiving $0.15 per share. The dividend yield is 1.5% based on this payment, which is a little bit low compared to the other companies in the industry.

View our latest analysis for Edgewell Personal Care

Edgewell Personal Care's Dividend Is Well Covered By Earnings

It would be nice for the yield to be higher, but we should also check if higher levels of dividend payment would be sustainable. Before making this announcement, Edgewell Personal Care was easily earning enough to cover the dividend. This means that most of its earnings are being retained to grow the business.

Looking forward, earnings per share is forecast to rise by 53.1% over the next year. If the dividend continues on this path, the payout ratio could be 16% by next year, which we think can be pretty sustainable going forward.

Dividend Volatility

The company has a long dividend track record, but it doesn't look great with cuts in the past. Since 2014, the annual payment back then was $1.60, compared to the most recent full-year payment of $0.60. Doing the maths, this is a decline of about 9.3% per year. Declining dividends isn't generally what we look for as they can indicate that the company is running into some challenges.

The Dividend's Growth Prospects Are Limited

Given that dividend payments have been shrinking like a glacier in a warming world, we need to check if there are some bright spots on the horizon. Earnings per share has been crawling upwards at 3.8% per year. Earnings growth is slow, but on the plus side, the dividend payout ratio is low and dividends could grow faster than earnings, if the company decides to increase its payout ratio.

Our Thoughts On Edgewell Personal Care's Dividend

Overall, a consistent dividend is a good thing, and we think that Edgewell Personal Care has the ability to continue this into the future. While the payout ratios are a good sign, we are less enthusiastic about the company's dividend record. The payment isn't stellar, but it could make a decent addition to a dividend portfolio.

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 1 warning sign for Edgewell Personal Care 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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