C.H. Robinson Worldwide (NASDAQ:CHRW) Has Affirmed Its Dividend Of $0.62

The board of C.H. Robinson Worldwide, Inc. (NASDAQ:CHRW) has announced that it will pay a dividend on the 2nd of October, with investors receiving $0.62 per share. Including this payment, the dividend yield on the stock will be 2.1%, which is a modest boost for shareholders' returns.

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C.H. Robinson Worldwide's Payment Could Potentially Have Solid Earnings Coverage

It would be nice for the yield to be higher, but we should also check if higher levels of dividend payment would be sustainable. Based on the last payment, C.H. Robinson Worldwide was quite comfortably earning enough to cover the dividend. This means that a large portion of its earnings are being retained to grow the business.

Over the next year, EPS is forecast to expand by 28.7%. If the dividend continues along recent trends, we estimate the payout ratio will be 45%, which is in the range that makes us comfortable with the sustainability of the dividend.

Check out our latest analysis for C.H. Robinson Worldwide

C.H. Robinson Worldwide Has A Solid Track Record

Even over a long history of paying dividends, the company's distributions have been remarkably stable. The annual payment during the last 10 years was $1.52 in 2015, and the most recent fiscal year payment was $2.48. This works out to be a compound annual growth rate (CAGR) of approximately 5.0% a year over that time. Companies like this can be very valuable over the long term, if the decent rate of growth can be maintained.

C.H. Robinson Worldwide Could Grow Its Dividend

Some investors will be chomping at the bit to buy some of the company's stock based on its dividend history. It's encouraging to see that C.H. Robinson Worldwide has been growing its earnings per share at 5.6% a year over the past five years. The company is paying a reasonable amount of earnings to shareholders, and is growing earnings at a decent rate so we think it could be a decent dividend stock.

C.H. Robinson Worldwide Looks Like A Great Dividend Stock

Overall, we like to see the dividend staying consistent, and we think C.H. Robinson Worldwide might even raise payments in the future. Earnings are easily covering distributions, and the company is generating plenty of cash. All in all, this checks a lot of the boxes we look for when choosing an income stock.

Companies possessing a stable dividend policy will likely enjoy greater investor interest than those suffering from a more inconsistent approach. Still, investors need to consider a host of other factors, apart from dividend payments, when analysing a company. As an example, we've identified 1 warning sign for C.H. Robinson Worldwide that you should be aware of before investing. Is C.H. Robinson Worldwide 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.