St. Joe's (NYSE:JOE) Shareholders Will Receive A Bigger Dividend Than Last Year
St. Joe Company (NYSE:JOE) will increase its dividend to $0.16 on December 12, up from last year's payment. Despite the increase, the yield remains low at 1.1%. The company has a solid earnings coverage for the dividend, with a potential 25.7% rise in earnings per share next year. St. Joe has shown strong dividend growth, with a CAGR of 15% over the past five years, although it has a short payment history. Overall, the dividend increase is seen positively, making St. Joe a strong income stock.
The St. Joe Company's (NYSE:JOE) dividend will be increasing from last year's payment of the same period to $0.16 on 12th of December. Even though the dividend went up, the yield is still quite low at only 1.1%.
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St. Joe's Payment Could Potentially Have Solid Earnings Coverage
Even a low dividend yield can be attractive if it is sustained for years on end. Before making this announcement, St. Joe was easily earning enough to cover the dividend. As a result, a large proportion of what it earned was being reinvested back into the business.
Looking forward, earnings per share could rise by 25.7% over the next year if the trend from the last few years continues. Assuming the dividend continues along recent trends, we think the payout ratio could be 31% by next year, which is in a pretty sustainable range.
View our latest analysis for St. Joe
St. Joe Doesn't Have A Long Payment History
The dividend's track record has been pretty solid, but with only 5 years of history we want to see a few more years of history before making any solid conclusions. The dividend has gone from an annual total of $0.32 in 2020 to the most recent total annual payment of $0.64. This works out to be a compound annual growth rate (CAGR) of approximately 15% a year over that time. It is always nice to see strong dividend growth, but with such a short payment history we wouldn't be inclined to rely on it until a longer track record can be developed.
The Dividend Looks Likely To Grow
Some investors will be chomping at the bit to buy some of the company's stock based on its dividend history. St. Joe has impressed us by growing EPS at 26% per year over the past five years. Earnings per share is growing at a solid clip, and the payout ratio is low which we think is an ideal combination in a dividend stock as the company can quite easily raise the dividend in the future.
We Really Like St. Joe's Dividend
Overall, a dividend increase is always good, and we think that St. Joe is a strong income stock thanks to its track record and growing earnings. The company is easily earning enough to cover its dividend payments and it is great to see that these earnings are being translated into cash flow. All in all, this checks a lot of the boxes we look for when choosing an income stock.
Investors generally tend to favour companies with a consistent, stable dividend policy as opposed to those operating an irregular one. However, there are other things to consider for investors when analysing stock performance. Taking the debate a bit further, we've identified 1 warning sign for St. Joe that investors need to be conscious of moving forward. If you are a dividend investor, you might also want to look at our curated list of high yield dividend stocks.
