- Whirlpool is a value and high-yield investors can rely on it.
- The company is among the world's leading appliance manufacturers and has a unique position.
- A major upswing in share prices is unlikely but steady, long-term capital returns are.
Do you want to know more about the WHR dividend, its history and what you might expect from the company over the next few years? In that case, we cover how to evaluate the Whirlpool dividend, how the yield may change over time and whether the distribution will grow.
The key takeaway from all this is that Whirlpool is a blue-chip company that pays a reliable dividend. The company also offers value, although investors expecting a major share price rally may end up disappointed.
Whirlpool Corporation History
Whirlpool Corporation (NYSE: WHR) humbly began in a machine shop. Louis Upton and his uncle Emory founded and produced the first machine-powered clothes washer. The business quickly blossomed, resulting in a merger and name change to Nineteen Hundred Corporation and, after WWI, to Whirlpool Corporation.
Whirlpool Corporation Overview
Whirlpool is a multinational appliance manufacturer focused on home and kitchen products. Its brands include the flagship Whirlpool, Maytag, KitchenAid and JennAir brands, among many others. The company brought in more than $21 billion in 2022 and employed about 78,000 individuals globally. The company operates 70 manufacturing and assembly locations worldwide. Nine are in the U.S.
In terms of market cap, sales and global reach, Whirlpool is ranked No. 4, behind two Chinese companies and a smart home appliance manufacturer.
Whirlpool Has Investment Grade Debt
Debt is one method of grading an investment, and Whirlpool's debt is considered investment grade. The company is rated at BBB or higher by most of the major credit rating agencies, which is on the low end of the scale but also comes with a steady sub-rating. This means that Whirlpool's debt load is a little high for an investment grade but not too high and is well-managed, with few risks on the horizon.
The Analysts Hold Whirlpool
The analysts are not active in their coverage of Whirlpool, but there is a clear takeaway. The stock is at least a "hold" for long-term investors, and the price action is well-supported at the low end of the 10-year price range. The analysts' sentiment tends to firm during economic upswings and periods of growth, but it will also flag when cycles turn.
Consumer Demand Whirlpool Brands
Whirlpool and its brands are among the top-rated brands on most ratings websites. Whirlpool typically commands three to four spots on any of these lists. The core brand is among them as well as KitchenAid and Maytag.
Institutional Interest is High
The institutions like to hold Whirlpool as well. They hold it for the dividend income and own more than 90% of the company. Their holdings tend to ebb and flow along with the business cycle but always remain high. The takeaway is that Whirlpool could be on a list of 10 dividend stocks to hold forever.
Whirlpool Dividend Data
Whirlpool has been paying a dividend for many decades and has a long track record of dividend growth. The company hasn't always increased the distribution on a consecutive annual basis, and there was one payment gap in the late 1990s. Other than that, it has only ever increased its distribution. Most recently, Whirlpool has succeeded in more than 10 consecutive annual distribution increases, which qualify it for the Dividend Achievers list.
Dividend Amount per Share
Whirlpool's dividend per share was $7 in early 2023 and should grow by double digits annually. At the time, the company had increased its payout for 12 consecutive years and ran a 10% compound annual growth rate (CAGR). The CAGR is the average growth rate of the dividend over five years. This is an indication but not a guarantee that future dividend increases will also be larger. The payout ratio is 35%, which suggests there is room in the cash flow to sustain dividend increases for many years, if not at 10% CAGR. This information and a dividend calculator can help determine how a WHR investment may fit into your account.
WHR Dividend Yield Range
WHR dividend yield has fluctuated between lows near 2% and highs near 5%. The range is compounded by dividend increases that have the low end and high end of the range edging higher, which is good news for investors. Investors looking to buy in over time expect a steadily increasing investment yield that will help compound their returns. A dividend stock screener can find other compelling investments that match WHR or may even provide better returns.
Whirlpool has competitors, but it also has a deep moat built on its brand strength and U.S.-based operations. Many of its competitors are based off-shore and are manufacturing off-shore as well. What this means for consumers is a reliable product that is easier to maintain and repair. Generally speaking, it reigns in its dividend sector.
Dividend Capture Strategy for WHR
The dividend capture strategy for WHR is straightforward to execute and centers on a single key date, the ex-dividend date. You will get the dividend if you know the ex-dividend date and own the stock the day before that day.
There are other important days to know about, but they don't affect dividend eligibility. So, what is the ex-dividend date?
The ex-dividend date is the first day a stock trades without the value of its dividend. If you own the stock the day before the ex-dividend day, you have bought the stock with the dividend value included. You will be recorded as an owner of the stock and receive the dividend payment when it is distributed.
But don't all stock owners get the dividend?
That is a good question, but no, they don't. Stocks trade and exchange hands randomly (for the most part) daily. The ownership of stock can change multiple times throughout the year. A company could never pay all of those owners, and it shouldn't. It should only pay one dividend for each share, so how does that work?
A company that wants to pay a dividend has to declare it. The dividend declaration may or may not coincide with the earrings report, but Whirlpool's does. The declaration includes the amount of the payment, the record date, the distribution date and the ex-dividend date. The company records all owners of the stock on the day of record, but they record ownership as of the end of the day on the day before the ex-dividend date. If it sounds confusing, it is, but that's how it works. The only requirement to receive the dividend is to be an owner the day before the ex-dividend date at the closing of trading.
How long do you have to own WHR stock to get the dividend?
Believe it or not, you only have to own WHR stock for about 18 hours to receive the dividend payment for that quarter. That's right, about 18 hours is the time it takes to qualify for the dividend. That's the time from just before 4 p.m. on the day before the ex-dividend date until just after the opening on the next day, the ex-dividend date.
Future of WHR Dividend
The future of the WHR dividend looks very promising for investors. The company pays a high yield and doesn't cost an arm and a leg, so it is easy to load up on a position. The downside is that this company may never see a significant increase in its price multiple, but that doesn't matter. The lack of price-multiple growth is insignificant in the face of the yield and company growth trajectory. The stock will produce capital gains over its life, just not those high-octane returns faster growing, less-visible businesses can deliver.
Whirlpool: Good Value for Long-Term Investors
The WHR stock dividend is more exciting than the business. Whirlpool may be a value trap, but who cares about a multiple expansion when the company is delivering capital growth, earnings, free cash flow and a high-yielding dividend that is also growing? If you want a multiple expansion, look somewhere else. Whirlpool should be on your watchlist if you want a high-quality blue-chip dividend growth stock.
Here are some of the most commonly and frequently asked questions about Whirlpool, Whirlpool stock and the Whirlpool stock dividend.
Does WHR pay dividends?
Whirlpool not only pays a dividend but is high-yield, a value and is growing. The yield was nearly 5% in early 2023 and came at the cost of only nine times earnings. The WHR dividend history suggests increases will continue for at least the next few years.
How often does WHR pay dividends?
Whirlpool pays dividends quarterly, like most stocks. The declaration comes out a day or so before the earnings report and is usually recorded or goes ex-dividend about a month later.
Does Whirlpool have sufficient earnings to cover its dividend?
Whirlpool has more than enough earnings to cover its dividend. It has more than enough earnings to cover its dividend, pay down debt, increase the dividend and buy back shares. It's in good shape.
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