Albemarle's (NYSE:ALB) Dividend Will Be $0.405

The board of Albemarle Corporation (NYSE:ALB) has announced that it will pay a dividend of $0.405 per share on the 1st of April. This means the dividend yield will be fairly typical at 2.1%.

See our latest analysis for Albemarle

Estimates Indicate Albemarle's Dividend Coverage Likely To Improve

While it is always good to see a solid dividend yield, we should also consider whether the payment is feasible. Even in the absence of profits, Albemarle is paying a dividend. The company is also yet to generate cash flow, so the dividend sustainability is definitely questionable.

Looking forward, earnings per share is forecast to rise exponentially over the next year. If the dividend continues along recent trends, we estimate the payout ratio will be 8.0%, so there isn't too much pressure on the dividend.

Albemarle Has A Solid Track Record

The company has an extended history of paying stable dividends. Since 2015, the annual payment back then was $1.10, compared to the most recent full-year payment of $1.62. This means that it has been growing its distributions at 3.9% 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.

Dividend Growth May Be Hard To Achieve

Investors could be attracted to the stock based on the quality of its payment history. Albemarle hasn't seen much change in its earnings per share over the last five years. Earnings growth isn't particularly strong, and if the company isn't able to become profitable fairly soon, the dividend could come under pressure.

Albemarle's Dividend Doesn't Look Sustainable

Overall, we don't think this company makes a great dividend stock, even though the dividend wasn't cut this year. Although they have been consistent in the past, we think the payments are a little high to be sustained. We would probably look elsewhere for an income investment.

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. Taking the debate a bit further, we've identified 1 warning sign for Albemarle that investors need to be conscious of moving forward. Is Albemarle not quite the opportunity you were looking for? Why not check out our selection of top dividend stocks.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.