Quaker Chemical Corporation (NYSE: KWR) the dividend will increase to US $ 0.41 on January 31. This brings the annual payout to 0.7% of the current share price, which is sadly less than what the industry is paying.

Quaker Chemical’s dividend well covered by earnings

Even a low dividend yield can be attractive if it lasts for years. Before making this announcement, Quaker Chemical was easily earning enough to cover the dividend. As a result, much of what she earned was reinvested in the business.

Over the next year, EPS is expected to drop 8.4%. If the dividend continues on the same path it has been recently, we estimate the payout ratio could be 22%, which is comfortable for the company to continue going forward.

NYSE: KWR Historical Dividend January 10, 2022

Quaker Chemical has a strong track record

Even over a long history of paying dividends, the company’s distributions have been remarkably stable. As of 2012, the first annual payment was $ 0.94, compared to the most recent annual payment of $ 1.66. This means that he increased his distributions by 5.9% per year during this period. Companies like this can be of great benefit in the long run, if a decent rate of growth can be maintained.

The dividend seems likely to increase

Investors might be attracted to the stock depending on the quality of its payment history. It is encouraging to see that Quaker Chemical has increased its earnings per share by 15% per year over the past five years. Quaker Chemical certainly has the potential to increase its dividend in the future with earnings on an uptrend and a low payout ratio.

Quaker Chemical Looks Like A Great Dividend Stock

Overall, we think it could be an attractive income stock, and it’s only getting better by paying a higher dividend this year. Profits easily cover the company’s distributions, and the business generates a lot of cash. If earnings decline over the next 12 months, the dividend could be shaken slightly, but we don’t think that should be too much of a problem in the long run. Overall, this ticks a lot of the boxes that we look for when choosing an income stock.

It is important to note that companies with a consistent dividend policy will generate greater investor confidence than those with an erratic policy. Meanwhile, despite the importance of dividend payments, they aren’t the only factors our readers should be aware of when valuing a business. For example, we have identified 2 warning signs for Quaker Chemical (1 is significant!) That you should know before investing. We have also set up a list of global stocks with a solid dividend.

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