WD-40 Co (NASDAQ:WDFC) recently announced a dividend of $0.88 per share, payable on 2024-01-31, with the ex-dividend date set for 2024-01-18. As investors look forward to this upcoming payment, the spotlight also shines on the company's dividend history, yield, and growth rates. Using the data from GuruFocus, let's look into WD-40 Co's dividend performance and assess its sustainability.
This Powerful Chart Made Peter Lynch 29% A Year For 13 Years
How to calculate the intrinsic value of a stock?
WD-40 Co manufactures and sells lubricants and cleaning products. The firm's product categories include maintenance and cleaning products. Maintenance products include the WD-40 signature brand aerosol spray lubricant as well as degreasers, rust removers, and bicycle maintenance products. Cleaning products include toilet cleaners, carpet stain removers and deodorizers, and heavy-duty hand soaps used to clean grease. The company organizes itself into three segments based on geography: Americas, Europe/Middle East/Africa, and Asia-Pacific. Around half of the company's revenue comes from the Americas segment, which includes the United States, Canada, and Latin America.
WD-40 Co's Dividend Analysis
A Glimpse at WD-40 Co's Dividend History
WD-40 Co has maintained a consistent dividend payment record since 1985, with dividends currently distributed on a quarterly basis. The company has increased its dividend each year since 2006, earning the title of a dividend achiever, which is reserved for companies that have increased their dividend annually for at least the past 18 years. Below is a chart showing annual Dividends Per Share to track historical trends.
Breaking Down WD-40 Co's Dividend Yield and Growth
As of today, WD-40 Co currently has a 12-month trailing dividend yield of 1.23% and a 12-month forward dividend yield of 1.30%, indicating an anticipated increase in dividend payments over the next 12 months. Over the past three years, WD-40 Co's annual dividend growth rate was 7.70%. Extending to a five-year horizon, this rate increased to 9.00% per year. Over the past decade, WD-40 Co's annual dividends per share growth rate stands at an impressive 10.80%. Based on WD-40 Co's dividend yield and five-year growth rate, the 5-year yield on cost for WD-40 Co stock as of today is approximately 1.89%.
WD-40 Co's Dividend Analysis
The Sustainability Question: Payout Ratio and Profitability
To assess the sustainability of the dividend, one needs to evaluate the company's payout ratio. The dividend payout ratio provides insights into the portion of earnings the company distributes as dividends. A lower ratio suggests that the company retains a significant part of its earnings, thereby ensuring the availability of funds for future growth and unexpected downturns. As of 2023-11-30, WD-40 Co's dividend payout ratio is 0.65. WD-40 Co's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks WD-40 Co's profitability 9 out of 10 as of 2023-11-30, suggesting good profitability prospects. The company has reported positive net income for each of the past decade, further solidifying its high profitability.
Growth Metrics: The Future Outlook
WD-40 Co's growth rank of 9 out of 10 suggests that the company's growth trajectory is good relative to its competitors. The company's revenue, indicated by the revenue per share and 3-year revenue growth rate, has increased by approximately 9.90% per year on average, outperforming approximately 51.07% of global competitors. The 3-year EPS growth rate shows an average annual increase of 3.20%, outperforming approximately 37.2% of global competitors. Lastly, the 5-year EBITDA growth rate of 2.70% outperforms approximately 33.09% of global competitors.
Next Steps
In conclusion, WD-40 Co's dividend payments, dividend growth rate, payout ratio, profitability, and growth metrics paint a picture of a company with a strong commitment to returning value to shareholders while maintaining a solid financial foundation. The consistent increase in dividends coupled with a sustainable payout ratio and strong profitability indicate that WD-40 Co is well-positioned to continue its dividend payments into the future. The growth metrics suggest that the company is not resting on its laurels but is actively working to ensure continued success. Investors considering WD-40 Co for its dividend prospects should feel reassured by these indicators, but as always, should conduct their due diligence and consider the broader market context. GuruFocus Premium users can screen for high-dividend yield stocks using the High Dividend Yield Screener.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
