FMC Corporation (NYSE: FMC) the dividend will increase to $ 0.53 on January 20. Based on the announced payment, the dividend yield for the company will be 1.9%, which is fairly typical for the industry.

Check out our latest analysis for FMC

FMC payment has strong revenue coverage

We’re not overly impressed with dividend yields unless they can be sustained over time. Based on the last payment, FMC was earning comfortably enough to cover the dividend. This indicates that a large portion of the profits are reinvested in the business, with the aim of fueling growth.

Going forward, earnings per share are expected to increase by 53.6% over the next year. If the dividend continues on that path, the payout ratio could be 32% by next year, which we believe can be quite sustainable going forward.

FMC has a solid track record

The company has a strong history of paying dividends with very little fluctuation. Since 2011, the dividend has increased from US $ 0.30 to US $ 2.12. This works out to a compound annual growth rate (CAGR) of around 22% per year over that time period. So, dividends grew quite quickly, and what is even more impressive, they haven’t seen any noticeable decline during that time.

The dividend seems likely to increase

Investors in the company will be happy to receive dividends for some time. FMC has impressed us by increasing BPA by 38% per year over the past five years. FMC clearly has the ability to grow rapidly while returning money to shareholders, which positions it to be a strong dividend payer going forward.

We really like the FMC dividend

Overall, we think it could be an attractive income stock, and it’s only getting better by paying a higher dividend this year. The company easily earns enough to cover its dividend payments and it’s great to see that those profits translate into cash flow. All of these factors taken into account, we believe this has strong potential as a dividend-paying stock.

Market movements testify to the high value of a coherent dividend policy compared to a more unpredictable one. However, there are other things for investors to consider when analyzing the performance of stocks. As an example, we have met 2 warning signs for FMC you need to be aware of it, and one of them is a little rude. We have also set up a list of global stocks with a solid dividend.

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This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts using only unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock and does not take into account your goals or your financial situation. Our aim is to bring you long-term, targeted analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price sensitive companies or qualitative documents. Simply Wall St has no position in any of the stocks mentioned.