A comprehensive analysis of WM's dividend history, growth, and future prospects
Waste Management Inc (WM, Financial) recently announced a dividend of $0.7 per share, payable on 2023-09-22, with the ex-dividend date set for 2023-09-07. As investors anticipate this upcoming payment, it's crucial to examine the company's dividend history, yield, and growth rates. Using GuruFocus data, let's delve into Waste Management Inc's dividend performance and assess its sustainability.
About Waste Management Inc
Waste Management Inc is the largest integrated provider of traditional solid waste services in the United States, operating 259 active landfills and about 337 transfer stations. The company serves residential, commercial, and industrial end markets and is also a leading recycler in North America.
Waste Management Inc's Dividend History
Waste Management Inc has maintained a consistent dividend payment record since 1998, with dividends currently distributed on a quarterly basis. The company has increased its dividend each year since 1999, earning the title of a dividend achiever, a distinction given to companies that have increased their dividend each year for at least the past 24 years. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Waste Management Inc's Dividend Yield and Growth
As of today, Waste Management Inc currently has a 12-month trailing dividend yield of 1.73% and a 12-month forward dividend yield of 1.79%. This indicates an expectation of increased dividend payments over the next 12 months.
Over the past three years, Waste Management Inc's annual dividend growth rate was 8.20%. Extended to a five-year horizon, this rate increased to 8.40% per year. Over the past decade, Waste Management Inc's annual dividends per share growth rate stands at 6.20%.
Based on Waste Management Inc's dividend yield and five-year growth rate, the 5-year yield on cost of Waste Management Inc stock as of today is approximately 2.59%.
Dividend Sustainability: 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 2023-06-30, Waste Management Inc's dividend payout ratio is 0.49.
Waste Management Inc's profitability rank of 8 out of 10, as of 2023-06-30, suggests good profitability prospects. The company has reported positive net income for each year over the past decade, further solidifying its high profitability.
Future Prospects: Growth Metrics
For the sustainability of dividends, a company must have robust growth metrics. Waste Management Inc's growth rank of 8 out of 10 suggests a good growth trajectory relative to its competitors.
Waste Management Inc's revenue per share and 3-year revenue growth rate indicate a strong revenue model. The company's revenue has increased by approximately 9.50% per year on average, outperforming approximately 59.09% of global competitors.
The company's 3-year EPS growth rate showcases its ability to grow earnings, a key component for sustaining dividends in the long run. During the past three years, Waste Management Inc's earnings increased by approximately 11.30% per year on average, outperforming approximately 53.09% of global competitors.
Lastly, the company's 5-year EBITDA growth rate of 2.30% outperforms approximately 27.27% of global competitors.
Conclusion
Considering Waste Management Inc's consistent dividend payments, impressive growth rate, reasonable payout ratio, high profitability, and robust growth metrics, the company presents a compelling case for dividend-focused investors. However, it's crucial to monitor these factors over time to ensure the sustainability of dividends. GuruFocus Premium users can screen for high-dividend yield stocks using the High Dividend Yield Screener.
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