The St. Joe Company (NYSE:JOE) will pay a dividend of $0.10 on the 15th of June. Including this payment, the dividend yield on the stock will be 1.0%, which is a modest boost for shareholders' returns.
See our latest analysis for St. Joe
St. Joe's Dividend Is Well Covered By Earnings
If it is predictable over a long period, even low dividend yields can be attractive. However, St. Joe's earnings easily cover the dividend. This means that most of its earnings are being retained to grow the business.
Over the next year, EPS could expand by 7.3% if recent trends continue. Assuming the dividend continues along recent trends, we think the payout ratio could be 32% by next year, which is in a pretty sustainable range.
St. Joe Doesn't Have A Long Payment History
The dividend hasn't seen any major cuts in the past, but the company has only been paying a dividend for 2 years, which isn't that long in the grand scheme of things. The annual payment during the last 2 years was $0.32 in 2021, and the most recent fiscal year payment was $0.40. This implies that the company grew its distributions at a yearly rate of about 12% over that duration. It is always nice to see strong dividend growth, but with such a short payment history we wouldn't be inclined to rely on it until a longer track record can be developed.
We Could See St. Joe's Dividend Growing
Some investors will be chomping at the bit to buy some of the company's stock based on its dividend history. St. Joe has seen EPS rising for the last five years, at 7.3% per annum. With a decent amount of growth and a low payout ratio, we think this bodes well for St. Joe's prospects of growing its dividend payments in the future.
In Summary
Overall, we think St. Joe is a solid choice as a dividend stock, even though the dividend wasn't raised this year. The dividend has been at reasonable levels historically, but that hasn't translated into a consistent payment. The payment isn't stellar, but it could make a decent addition to a dividend portfolio.
Investors generally tend to favour companies with a consistent, stable dividend policy as opposed to those operating an irregular one. Meanwhile, despite the importance of dividend payments, they are not the only factors our readers should know when assessing a company. Just as an example, we've come across 2 warning signs for St. Joe you should be aware of, and 1 of them is concerning. Looking for more high-yielding dividend ideas? Try our collection of strong dividend payers.
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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.
About NYSE:JOE
St. Joe
Operates as a real estate development, asset management, and operating company in Northwest Florida.
Questionable track record with imperfect balance sheet.
