FMC Corporation (NYSE:FMC) has announced that it will pay a dividend of $0.58 per share on the 18th of April. The dividend yield will be 4.0% based on this payment which is still above the industry average.
See our latest analysis for FMC
FMC’s Earnings Easily Cover The Distributions
Impressive dividend yields are good, but this doesn’t matter much if the payments can’t be sustained. Based on the last payment, FMC was earning enough to cover the dividend, but free cash flows weren’t positive. We think that cash flows should take priority over earnings, so this is definitely a worry for the dividend going forward.
Looking forward, earnings per share is forecast to fall by 55.8% over the next year. If the dividend continues along recent trends, we estimate the payout ratio could be 54%, which we consider to be quite comfortable, with most of the company’s earnings left over to grow the business in the future.
