A. O. Smith Corporation (NYSE:AOS) will increase its dividend on the 15th of November to $0.34, which is 6.3% higher than last year’s payment from the same period of $0.32. This takes the annual payment to 1.5% of the current stock price, which is about average for the industry.
See our latest analysis for A. O. Smith
A. O. Smith’s Projected Earnings Seem Likely To Cover Future Distributions
We aren’t too impressed by dividend yields unless they can be sustained over time. Before making this announcement, A. O. Smith was easily earning enough to cover the dividend. This means that most of what the business earns is being used to help it grow.
Looking forward, earnings per share is forecast to rise by 25.4% over the next year. Assuming the dividend continues along recent trends, we think the payout ratio could be 30% by next year, which is in a pretty sustainable range.
A. O. Smith Has A Solid Track Record
The company…
