Sherwin-Williams' (NYSE:SHW) Dividend Will Be $0.605

The board of The Sherwin-Williams Company (NYSE:SHW) has announced that it will pay a dividend on the 8th of December, with investors receiving $0.605 per share. Including this payment, the dividend yield on the stock will be 1.0%, which is a modest boost for shareholders' returns.

View our latest analysis for Sherwin-Williams

Sherwin-Williams' Earnings Easily Cover The Distributions

If it is predictable over a long period, even low dividend yields can be attractive. Before making this announcement, Sherwin-Williams was easily earning enough to cover the dividend. This means that most of what the business earns is being used to help it grow.

Looking forward, earnings per share is forecast to rise by 23.7% over the next year. If the dividend continues on this path, the payout ratio could be 24% by next year, which we think can be pretty sustainable going forward.

Sherwin-Williams Has A Solid Track Record

Even over a long history of paying dividends, the company's distributions have been remarkably stable. Since 2013, the annual payment back then was $0.667, compared to the most recent full-year payment of $2.42. This works out to be a compound annual growth rate (CAGR) of approximately 14% a year over that time. It is good to see that there has been strong dividend growth, and that there haven't been any cuts for a long time.

Sherwin-Williams Could Grow Its Dividend

Investors could be attracted to the stock based on the quality of its payment history. Sherwin-Williams has impressed us by growing EPS at 6.9% per year over the past five years. With a decent amount of growth and a low payout ratio, we think this bodes well for Sherwin-Williams' prospects of growing its dividend payments in the future.

We Really Like Sherwin-Williams' Dividend

Overall, we like to see the dividend staying consistent, and we think Sherwin-Williams might even raise payments in the future. 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.

Market movements attest to how highly valued a consistent dividend policy is compared to one which is more unpredictable. At the same time, there are other factors our readers should be conscious of before pouring capital into a stock. For example, we've picked out 1 warning sign for Sherwin-Williams that investors should know about before committing capital to this stock. Is Sherwin-Williams 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.