The board of CDW Corporation (NASDAQ:CDW) has announced that it will pay a dividend on the 10th of June, with investors receiving $0.625 per share. Based on this payment, the dividend yield will be 1.3%, which is fairly typical for the industry.

We've discovered 1 warning sign about CDW. View them for free.

CDW's Future Dividend Projections Appear Well Covered By Earnings

We like a dividend to be consistent over the long term, so checking whether it is sustainable is important. Before making this announcement, CDW was easily earning enough to cover the dividend. As a result, a large proportion of what it earned was being reinvested back into the business.

The next year is set to see EPS grow by 19.3%. If the dividend continues on this path, the payout ratio could be 30% by next year, which we think can be pretty sustainable going forward.NasdaqGS:CDW Historic Dividend May 20th 2025

See our latest analysis for CDW

CDW Has A Solid Track Record

Even over a long history of paying dividends, the company's distributions have been remarkably stable. The annual payment during the last 10 years was $0.17 in 2015, and the most recent fiscal year payment was $2.50. This works out to be a compound annual growth rate (CAGR) of approximately 31% a year over that time. It is good to see that there has been strong dividend growth, and that there haven't been any cuts for a long time.

CDW Could Grow Its Dividend

Investors could be attracted to the stock based on the quality of its payment history. CDW has impressed us by growing EPS at 9.6% per year over the past five years. With a decent amount of growth and a low payout ratio, we think this bodes well for CDW's prospects of growing its dividend payments in the future.

CDW Looks Like A Great Dividend Stock

In summary, it is good to see that the dividend is staying consistent, and we don't think there is any reason to suspect this might change over the medium term. Earnings are easily covering distributions, and the company is generating plenty of cash. All of these factors considered, we think this has solid potential as a dividend stock.

Market movements attest to how highly valued a consistent dividend policy is compared to one which is more unpredictable. Still, investors need to consider a host of other factors, apart from dividend payments, when analysing a company. As an example, we've identified 1 warning sign for CDW that you should be aware of before investing. If you are a dividend investor, you might also want to look at our curated list of high yield dividend stocks.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an 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 account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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