C.H. Robinson Worldwide (NASDAQ:CHRW) Has Announced A Dividend Of $0.62

C.H. Robinson Worldwide, Inc.'s (NASDAQ:CHRW) investors are due to receive a payment of $0.62 per share on 2nd of October. Including this payment, the dividend yield on the stock will be 2.0%, which is a modest boost for shareholders' returns.

While the dividend yield is important for income investors, it is also important to consider any large share price moves, as this will generally outweigh any gains from distributions. Investors will be pleased to see that C.H. Robinson Worldwide's stock price has increased by 33% in the last 3 months, which is good for shareholders and can also explain a decrease in the dividend yield.

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

Even a low dividend yield can be attractive if it is sustained for years on end. The last dividend was quite easily covered by C.H. Robinson Worldwide's earnings. This indicates that quite a large proportion of earnings is being invested back into the business.

Over the next year, EPS is forecast to expand by 29.4%. If the dividend continues along recent trends, we estimate the payout ratio will be 44%, which is in the range that makes us comfortable with the sustainability of the dividend.

View our latest analysis for C.H. Robinson Worldwide

C.H. Robinson Worldwide Has A Solid Track Record

The company has an extended history of paying stable dividends. Since 2015, the dividend has gone from $1.52 total annually to $2.48. This works out to be a compound annual growth rate (CAGR) of approximately 5.0% a year over that time. The dividend has been growing very nicely for a number of years, and has given its shareholders some nice income in their portfolios.

C.H. Robinson Worldwide Could Grow Its Dividend

Investors who have held shares in the company for the past few years will be happy with the dividend income they have received. C.H. Robinson Worldwide has seen EPS rising for the last five years, at 5.6% per annum. Since earnings per share is growing at an acceptable rate, and the payout policy is balanced, we think the company is positioning itself well to grow earnings and dividends in the future.

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

In summary, it is good to see that the dividend is staying consistent, and we don't think there is any reason to suspect this might change over the medium term. The company is easily earning enough to cover its dividend payments and it is great to see that these earnings are being translated into cash flow. All of these factors considered, we think this has solid potential as a dividend stock.

Investors generally tend to favour companies with a consistent, stable dividend policy as opposed to those operating an irregular one. However, there are other things to consider for investors when analysing stock performance. For example, we've picked out 1 warning sign for C.H. Robinson Worldwide that investors should know about before committing capital to this stock. 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.