Yahoo Finance John Wiley & Sons (NYSE:WLY) Is Increasing Its Dividend To $0.3525
The board of John Wiley & Sons, Inc. (NYSE:WLY) has announced that it will be increasing its dividend by 0.7% on the 25th of July to $0.3525, up from last year's comparable payment of $0.35. This will take the annual payment to 3.4% of the stock price, which is above what most companies in the industry pay.
See our latest analysis for John Wiley & Sons
John Wiley & Sons Might Find It Hard To Continue The Dividend
A big dividend yield for a few years doesn't mean much if it can't be sustained. While John Wiley & Sons is not profitable, it is paying out less than 75% of its free cash flow, which means that there is plenty left over for reinvestment into the business. This gives us some comfort about the level of the dividend payments.
Looking forward, earnings per share is forecast to expand by 0.5% over the next year. While it is good to see income moving in the right direction, it still looks like the company won't achieve profitability. The healthy cash flows are definitely a good sign though, so we wouldn't panic just yet, especially with the earnings growing.
John Wiley & Sons Has A Solid Track Record
The company has an extended history of paying stable dividends. The dividend has gone from an annual total of $1.00 in 2014 to the most recent total annual payment of $1.40. This implies that the company grew its distributions at a yearly rate of about 3.4% over that duration. Dividends have grown relatively slowly, which is not great, but some investors may value the relative consistency of the dividend.
The Dividend Has Limited Growth Potential
Investors could be attracted to the stock based on the quality of its payment history. However, things aren't all that rosy. John Wiley & Sons' earnings per share has shrunk at 38% a year over the past five years. A sharp decline in earnings per share is not great from from a dividend perspective. Even conservative payout ratios can come under pressure if earnings fall far enough. However, the next year is actually looking up, with earnings set to rise. We would just wait until it becomes a pattern before getting too excited.
In Summary
In summary, while it's always good to see the dividend being raised, we don't think John Wiley & Sons' payments are rock solid. The company has been bring in plenty of cash to cover the dividend, but we don't necessarily think that makes it a great dividend stock. This company is not in the top tier of income providing stocks.
It's important to note that companies having a consistent dividend policy will generate greater investor confidence than those having an erratic one. Meanwhile, despite the importance of dividend payments, they are not the only factors our readers should know when assessing a company. For instance, we've picked out 3 warning signs for John Wiley & Sons that investors should take into consideration. Is John Wiley & Sons 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.
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