Our analysis is based on comparing Essendant, Inc. with the following peers – Genuine Parts Company, WESCO International, Inc., ScanSource, Inc., Systemax Inc., Office Depot, Inc. and Acme United Corporation (GPC-US, WCC-US, SCSC-US, SYX-US, ODP-US and ACU-US).
Essendant, Inc.’s dividend yield is 6.21 percent and its dividend payout is -7.67 percent. This compares to a peer median dividend yield of 2.89 percent and a payout level of 30 percent. This relatively higher dividend yield and lower payout ratio makes the company a good candidate for dividend investors looking seeking good current dividend income within this peer group. In addition, the company’s relatively good dividend quality score of 67 out of a possible score of 100, underscores its attractiveness for dividend investors.
Dividend Quality Overview
- Over the last twelve months (prior to September 30, 2017), ESND-US paid a high quality dividend, which represents a yield of 6.21% at the current price.
- Dividend quality trend has not been consistent over the last five years. Dividends were paid during each of these years — of these 3 were high quality, 1 was medium quality and 1 was low quality.
- The ending cash balance, with a dividend coverage of 1.41x, provides a moderate cushion in case of a significant reduction of cash flows in the future.
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Over the last twelve months (prior to September 30, 2017), ESND-US paid a high quality dividend.
The source of the company’s cash to support the dividend paid over the last twelve months is operating cash flow (coverage of 11.14x), investing cash flow (coverage of -1.64x), issuance cash flow (coverage of -8.20x) and twelve-month prior cash (coverage of 1.10x), for a total dividend coverage of 2.41x.
ESND-US’s issuance cash flow includes outflows from net debt repayment (coverage of -7.86x).
These coverage ratio factors imply that the firm’s dividends are wholly paid from operating and investing cash flows net of any debt repayments, which suggests a high dividend quality.
|Dividend Yield (%)||1.7||1.22||1.33||1.75||2.62||6.21|
|Dividend Payout (%)||19.41||18.3||18.36||-47.46||32.37||-7.67|
A complete list of metrics and analysis is available on the company page.
Essendant, Inc. engages in the wholesale distribution of business products. It operated through the following segments: Business and Facility Essentials, ORS Industrial, CPO, and Automotive. Its product offerings include traditional office products, such as writing instruments, paper products, organizers and calendars and various office accessories; technology products, such as computer supplies and peripherals; office furniture, such as desks, filing and storage solutions, seating and systems furniture, along with a variety of products for niche markets, such as education government, healthcare and professional services; janitorial and break room supplies, which include janitorial and break room supplies, foodservice consumables, safety and security items, and paper and packaging supplies; and industrial supplies, which include hand and power tools, safety and security supplies, janitorial equipment and supplies and welding products. Its customer include independent office products dealers and contract stationers, office products mega-dealers, office products superstores, computer products resellers, office furniture dealers, mass merchandisers, mail order companies, sanitary supply distributors, drug and grocery store chains, e-commerce dealers and other independent distributors. The company was founded in 1981 and is headquartered in Deerfield, IL.
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