Yahoo Finance Knight-Swift Transportation Holdings' (NYSE:KNX) Dividend Will Be Increased To $0.14
Knight-Swift Transportation Holdings Inc. (NYSE:KNX) has announced that it will be increasing its dividend from last year's comparable payment on the 27th of March to $0.14. Despite this raise, the dividend yield of 0.9% is only a modest boost to shareholder returns.
Check out our latest analysis for Knight-Swift Transportation Holdings
Knight-Swift Transportation Holdings' Dividend Is Well Covered By Earnings
If it is predictable over a long period, even low dividend yields can be attractive. Before making this announcement, Knight-Swift Transportation Holdings 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 4.3%. If the dividend continues on this path, the payout ratio could be 11% by next year, which we think can be pretty sustainable going forward.
Knight-Swift Transportation Holdings Has A Solid Track Record
Even over a long history of paying dividends, the company's distributions have been remarkably stable. Since 2013, the dividend has gone from $0.24 total annually to $0.56. This implies that the company grew its distributions at a yearly rate of about 8.8% over that duration. The growth of the dividend has been pretty reliable, so we think this can offer investors some nice additional income in their portfolio.
The Dividend's Growth Prospects Are Limited
Investors could be attracted to the stock based on the quality of its payment history. Although it's important to note that Knight-Swift Transportation Holdings' earnings per share has basically not grown from where it was five years ago, which could erode the purchasing power of the dividend over time. While growth may be thin on the ground, Knight-Swift Transportation Holdings could always pay out a higher proportion of earnings to increase shareholder returns.
Knight-Swift Transportation Holdings Looks Like A Great Dividend Stock
Overall, a dividend increase is always good, and we think that Knight-Swift Transportation Holdings is a strong income stock thanks to its track record and growing earnings. Earnings are easily covering distributions, and the company is generating plenty of cash. All in all, this checks a lot of the boxes we look for when choosing an income stock.
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 1 warning sign for Knight-Swift Transportation Holdings that investors should take into consideration. Is Knight-Swift Transportation Holdings 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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