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How Likely Is Apogee Enterprises To Cut Their Dividend?

December 17, 2020 10:14 am
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This is your daily dividend safety check. Today, we consider Apogee Enterprises as its earning call is on December 18, 2020 before the bell. Let's look at Apogee Enterprises (NASDAQ:APOG) to see if its 3.23% dividend yield is safe, judging by its earnings to dividend payout ratio and history of dividend cuts.

Apogee Enterprises's Payout Ratio

A dividend's affordability can be measured by its payout ratio. It's equal to dividends per share divided by earnings per share. Investors should not be too concerned about Apogee Enterprises's relatively low payout ratio of 26.03%. When a payout ratio is low like this (i.e. below than 75%), it indicates a company has the money needed to cover its dividend. A ratio closer to 100% could suggest that a company is struggling to pay its dividend.

Has Apogee Enterprises Cut Its Dividend in the Recent Past?

For the most part, it is difficult to predict future behavior based on past activities, but companies with a recent history of dividend cuts are more likely than others to cut them again. If a company does not have a history of consistent or rising dividends, they have less incentive to appease income investors than companies that do. Apogee Enterprises has not cut its dividend in the last few years, implying its management is reluctant to do so. While there is no guarantee of dividend safety, this is indicative of reliable dividend actions.

How Safe Is Apogee Enterprises's Dividend Overall?

Apogee Enterprises has failed neither of our dividend safety tests. It has a low payout ratio and no recent case of dividend cut. With all of this in mind, it is quite unlikely that Apogee Enterprises will cut its dividend next quarter.

Looking for more help identifying reliable investments? Check out Benzinga's Breakout Opportunity Letter.

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Posted-In:

Dividends

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