Stock Analysis

Weyco Group (NASDAQ:WEYS) Has Affirmed Its Dividend Of $0.24

  •  Updated
NasdaqGS:WEYS
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Weyco Group, Inc.'s (NASDAQ:WEYS) investors are due to receive a payment of $0.24 per share on 30th of September. The dividend yield will be 3.6% based on this payment which is still above the industry average.

View our latest analysis for Weyco Group

Weyco Group's Dividend Is Well Covered By Earnings

While it is great to have a strong dividend yield, we should also consider whether the payment is sustainable. Based on the last payment, Weyco Group was earning enough to cover the dividend, but free cash flows weren't positive. With the company not bringing in any cash, paying out to shareholders is bound to become difficult at some point.

If the trend of the last few years continues, EPS will grow by 9.9% over the next 12 months. If the dividend continues along recent trends, we estimate the payout ratio will be 36%, which is in the range that makes us comfortable with the sustainability of the dividend.

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NasdaqGS:WEYS Historic Dividend August 8th 2022

Weyco Group Has A Solid Track Record

The company has been paying a dividend for a long time, and it has been quite stable which gives us confidence in the future dividend potential. Since 2012, the annual payment back then was $0.64, compared to the most recent full-year payment of $0.96. This implies that the company grew its distributions at a yearly rate of about 4.1% over that duration. Slow and steady dividend growth might not sound that exciting, but dividends have been stable for ten years, which we think makes this a fairly attractive offer.

The Dividend Has Growth Potential

The company's investors will be pleased to have been receiving dividend income for some time. Weyco Group has impressed us by growing EPS at 9.9% per year over the past five years. With a decent amount of growth and a low payout ratio, we think this bodes well for Weyco Group's prospects of growing its dividend payments in the future.

Our Thoughts On Weyco Group's Dividend

Overall, it's nice to see a consistent dividend payment, but we think that longer term, the current level of payment might be unsustainable. While Weyco Group is earning enough to cover the payments, the cash flows are lacking. We don't think Weyco Group is a great stock to add to your portfolio if income is your focus.

It's important to note that companies having a consistent dividend policy will generate greater investor confidence than those having an erratic one. Meanwhile, despite the importance of dividend payments, they are not the only factors our readers should know when assessing a company. Case in point: We've spotted 3 warning signs for Weyco Group (of which 2 can't be ignored!) you should know about. Looking for more high-yielding dividend ideas? Try our collection of strong dividend payers.

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