Landstar System (NASDAQ:LSTR) Has Affirmed Its Dividend Of $2.00

Landstar System, Inc.'s (NASDAQ:LSTR) investors are due to receive a payment of $2.00 per share on 19th of January. This means that the annual payment will be 1.8% of the current stock price, which is in line with the average for the industry.

Check out our latest analysis for Landstar System

Landstar System's Earnings Easily Cover The Distributions

We like to see a healthy dividend yield, but that is only helpful to us if the payment can continue. Before making this announcement, Landstar System was easily earning enough to cover the dividend. This means that most of its earnings are being retained to grow the business.

Over the next year, EPS is forecast to expand by 19.1%. Assuming the dividend continues along recent trends, we think the payout ratio could be 38% by next year, which is in a pretty sustainable range.

Landstar System 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. The annual payment during the last 10 years was $0.28 in 2013, and the most recent fiscal year payment was $3.32. This means that it has been growing its distributions at 28% per annum 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.

We Could See Landstar System's Dividend Growing

The company's investors will be pleased to have been receiving dividend income for some time. We are encouraged to see that Landstar System has grown earnings per share at 6.6% per year over the past five years. With a decent amount of growth and a low payout ratio, we think this bodes well for Landstar System's prospects of growing its dividend payments in the future.

Landstar System Looks Like A Great Dividend Stock

Overall, we think that this is a great income investment, and we think that maintaining the dividend this year may have been a conservative choice. Distributions are quite easily covered by earnings, which are also being converted to cash flows. 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. However, there are other things to consider for investors when analysing stock performance. Companies that are growing earnings tend to be the best dividend stocks over the long term. See what the 13 analysts we track are forecasting for Landstar System for free with public analyst estimates for the company. If you are a dividend investor, you might also want to look at our curated list of high yield dividend stocks.

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