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Highlights
- RPM International Inc. is approaching its ex-dividend date.
- Dividend payout ratio remains healthy, covered by earnings and free cash flow.
- Consistent dividend growth over the past decade showcases financial stability.
RPM International Inc. is a notable company in the industrial sector, known for its strong financial health and consistent dividend payments. With an impressive history of growth and strategic capital allocation, it continues to maintain a solid position in the market. RPM International Inc. belongs to the NYSE Metal and Mining Stocks sector.
A Strong Performer with Sustainable Dividends
RPM International Inc. (NYSE:RPM) is set to go ex-dividend in the coming days, an important date for those following dividend-paying companies. The ex-dividend date is a cutoff point, and only those owning shares prior to this date will be eligible for the upcoming dividend payment. As investors prepare for this, it’s worth diving into RPM International’s ability to maintain its reliable dividend payouts and what that means for the company’s long-term stability.
Healthy Dividend Coverage
One of the most crucial factors to consider when evaluating a company's dividend sustainability is the payout ratio. RPM International’s payout ratio stands at a modest 37%, indicating that the company is only distributing a fraction of its earnings as dividends. This is a positive sign, as it suggests the dividend is well-covered by the company’s profits. A lower payout ratio generally provides a buffer, reducing the risk of dividend cuts, even during periods of financial strain.
Additionally, RPM International’s free cash flow has also demonstrated a solid capacity to cover its dividend payments. The company’s dividend payments use just 37% of its free cash flow, which is another indicator of its ability to continue paying dividends without sacrificing financial stability. When both earnings and free cash flow comfortably cover dividend payouts, investors can feel confident about the sustainability of the dividend.
Strong Earnings Growth Supports Dividends
RPM International has not only managed to maintain a solid dividend payout but has also seen its earnings grow significantly. Over the past five years, RPM International’s earnings have risen at a compound annual growth rate of 20%. Such strong growth in earnings enhances the company’s ability to pay dividends while simultaneously allowing it to reinvest in its operations and pursue growth opportunities. With this consistent earnings expansion, RPM International is well-positioned to continue rewarding shareholders with growing dividends.
Long-Term Dividend Growth
Another promising sign is the history of RPM International’s dividend increases. Over the past decade, the company has raised its dividend by an average of 7.8% annually. This consistent growth in dividends reflects the company’s commitment to sharing its success with shareholders. Dividend increases are often a signal of strong financial performance, and RPM International’s steady dividend growth demonstrates that it has managed its business well over the long term.
RPM International Inc. continues to perform admirably, with its sustainable dividend policy backed by solid earnings and free cash flow. The company’s growing earnings, paired with its low payout ratio, offer assurance that its dividends are well-supported and poised for growth. Investors seeking reliable dividend income can look to RPM International’s consistent performance as a sign of stability and long-term success.
