Here's What We Like About Mobile Mini, Inc. (NASDAQ:MINI)'s Upcoming Dividend

Regular readers will know that we love our dividends at Simply Wall St, which is why it's exciting to see Mobile Mini, Inc. (NASDAQ:MINI) is about to trade ex-dividend in the next 4 days. You can purchase shares before the 25th of February in order to receive the dividend, which the company will pay on the 11th of March.

Mobile Mini's next dividend payment will be US$0.30 per share, on the back of last year when the company paid a total of US$1.21 to shareholders. Calculating the last year's worth of payments shows that Mobile Mini has a trailing yield of 2.8% on the current share price of $43.36. If you buy this business for its dividend, you should have an idea of whether Mobile Mini's dividend is reliable and sustainable. That's why we should always check whether the dividend payments appear sustainable, and if the company is growing.

View our latest analysis for Mobile Mini

Dividends are typically paid from company earnings. If a company pays more in dividends than it earned in profit, then the dividend could be unsustainable. Mobile Mini paid out more than half (58%) of its earnings last year, which is a regular payout ratio for most companies. Yet cash flow is typically more important than profit for assessing dividend sustainability, so we should always check if the company generated enough cash to afford its dividend. It distributed 34% of its free cash flow as dividends, a comfortable payout level for most companies.

It's positive to see that Mobile Mini's dividend is covered by both profits and cash flow, since this is generally a sign that the dividend is sustainable, and a lower payout ratio usually suggests a greater margin of safety before the dividend gets cut.

Click here to see the company's payout ratio, plus analyst estimates of its future dividends.

Have Earnings And Dividends Been Growing?

Businesses with strong growth prospects usually make the best dividend payers, because it's easier to grow dividends when earnings per share are improving. If earnings fall far enough, the company could be forced to cut its dividend. Fortunately for readers, Mobile Mini's earnings per share have been growing at 14% a year for the past five years. Mobile Mini is paying out a bit over half its earnings, which suggests the company is striking a balance between reinvesting in growth, and paying dividends. This is a reasonable combination that could hint at some further dividend increases in the future.

Another key way to measure a company's dividend prospects is by measuring its historical rate of dividend growth. In the past six years, Mobile Mini has increased its dividend at approximately 10% a year on average. It's exciting to see that both earnings and dividends per share have grown rapidly over the past few years.

The Bottom Line

Is Mobile Mini an attractive dividend stock, or better left on the shelf? Mobile Mini's growing earnings per share and conservative payout ratios make for a decent combination. We also like that it paid out a lower percentage of its cash flow. There's a lot to like about Mobile Mini, and we would prioritise taking a closer look at it.

Curious what other investors think of Mobile Mini? See what analysts are forecasting, with this visualisation of its historical and future estimated earnings and cash flow.

A common investment mistake is buying the first interesting stock you see. Here you can find a list of promising dividend stocks with a greater than 2% yield and an upcoming dividend.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.