Our analysis is based on comparing Westinghouse Air Brake Technologies Corp. with the following peers – Greenbrier Companies, Inc., American Railcar Industries, Inc., Trinity Industries, Inc., FreightCar America, Inc. and General Electric Company (GBX-US, ARII-US, TRN-US, RAIL-US and GE-US).
Westinghouse Air Brake Technologies Corp.’s dividend yield is 0.47 percent and its dividend payout is 12.26 percent. This compares to a peer average dividend yield of 2.00 percent and a payout level of 37.08 percent. This relatively lagging dividend performance could spur some dividend action going forward – as long as the company’s relatively strong dividend quality score of 83 out of a possible score of 100 looks sustainable.
Dividend Quality Overview
- Over the last twelve months (prior to March 31, 2017), WAB-US paid a high quality dividend, which represents a yield of 0.47% 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 8.09x, provides a substantial cushion in case of a significant reduction of cash flows in the future.
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Over the last twelve months (prior to March 31, 2017), WAB-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 10.03x), investing cash flow (coverage of -8.30x), issuance cash flow (coverage of 16.15x) and twelve-month prior cash (coverage of 13.73x), for a total dividend coverage of 9.09x.
WAB-US‘s issuance cash flow includes outflows from net share buybacks (coverage of -2.19x). Thus, the total coverage including share buybacks is 11.27x, which reflects our assumption that the cash paid for share buybacks is discretionary and could instead be used to pay dividends.
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 (%)||0.18||0.18||0.23||0.41||0.41||0.47|
|Dividend Payout (%)||3.08||4.32||5.52||6.83||10.78||12.26|
A complete list of metrics and analysis is available on the company page.
Westinghouse Air Brake Technologies Corp. engages in the provision of value added technology based equipment and services for the global rail industry. It operates through the following segments: Freight and Transit. The Freight Segment manufactures and services components for new and existing locomotives and freight cars; supplies rail control and infrastructure products including electronics, positive train control equipment, and signal design and engineering services; overhauls locomotives; and provides heat exchangers and cooling systems for rail and other industrial markets. The Transit Segment operates as faiveley transport, which manufactures and services components for new and existing passenger transit vehicles, typically regional trains, high speed trains, subway cars, light-rail vehicles and buses; supplies rail control and infrastructure products including electronics, positive train control equipment, and signal design and engineering services; builds new commuter locomotives; and refurbishes passenger transit vehicles. The company was founded in November 1999 and is headquartered in Wilmerding, PA.
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