Investors looking to benefit from Tempur Sealy (NYSE:TPX) International's (NYSE:TPX) dividend payments should take note of the upcoming ex-dividend date before November 15th. The company has announced it will pay out a quarterly dividend of $0.11 per share on December 4th, marking a continued tradition of rewarding shareholders.
Tempur Sealy has demonstrated a consistent ability to sustain its dividends, with last year's payouts representing just 19% of its profit and 23% of its free cash flow. This conservative payout ratio suggests a careful approach to dividend distribution, ensuring that the payments are well-covered by earnings.
Over the past five years, Tempur Sealy has shown a robust annual earnings growth rate of 22%, underlining the company's promising growth trajectory. In line with this performance, over the last three years, shareholders have enjoyed a steady increase in dividends at an average rate of approximately 16% per year. This trend not only reflects the company's financial health but also enhances its attractiveness to investors seeking income through dividends.
However, potential investors should be aware of certain investment risks associated with focusing on dividends. Tempur Sealy International has been flagged for two warning signs that warrant careful consideration before investing primarily for dividend returns.
The strategic moves by Tempur Sealy indicate a balance between maintaining a prudent financial policy and fostering investor confidence through progressive dividend increases. As the company continues to grow, the steady rise in dividend payments could be an indicator of management's confidence in the firm's future performance and stability.
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