Newell Brands Inc. (NASDAQ: NWL) is better off avoiding an upcoming dividend

Newell Brands Inc. (NASDAQ: NWL) which you can get the latest information at https://www.webull.com/quote/nasdaq-nwl is going to get the former dividend over the next 3 days.

Newell Brands’ next dividend payment will be $ 0.23 per share. Last year, the company distributed $ 0.92 per share to shareholders. Based on last years’ worth of payments, Newell Brands stock has a yield of approximately 4.8% at the current stock price of 23 19.23.

If a company pays more dividends than it earns, the dividend becomes unsustainable – which is an ideal situation. An unusually high payout rate of 209% of its profits suggests that shareholders usually have something to do with distributing profits. However, cash flows are more important than profitability to estimate dividends, so we need to see if the company generates enough cash to pay its distribution. In the past year, 50% of its free cash flow has been paid to dividends, within the usual range for most companies.

It is disappointing to see that dividends are not covered by profits, but money is very important from a dividend sustainability perspective, and Newell Brands has fortunately generated enough cash to fund its dividend. However, we are worried if the company is paying back more profits than its profits. Very few companies can pay large dividends consistently over their reported income.

Our revenue and dividends growing?

Companies with declining earnings are risky to dividend shareholders. If earnings decline and the company is forced to reduce its dividend, investors may see an increase in the value of their investment in smoke. Earnings per share of Newell Brands has declined nearly 20% year over year in the previous five years. Such a sharp decline cast doubt on the future viability of dividends.

Another important way to gauge a company’s dividend opportunities is to measure its historical dividend growth. Newell Brands has delivered average dividend growth of 16% per year over the past ten years. Newell Brands is already paying 209% of its profits, and we expect this dividend to grow rapidly in the future as revenue declines.

Underline

Is Newell Brands Worth Buying Its Dividend? It is never fun to look at a company’s earnings per share in a retreat. What’s more, Newell Brands pays the bulk of its revenue and more than half its free cash flow. It is difficult to tell if the business has the financial resources and time to turn things around without reducing the dividend. Bottom line: Newell Brands has some unfortunate traits that we think dividend investors may have a sub-optimal outcome. If you want to know the latest information for nasdaq lrcx, you can check at https://www.webull.com/quote/nasdaq-lrcx .

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