Delta Air Lines (NYSE:DAL) Is Paying Out A Larger Dividend Than Last Year

Yahoo

22-06-2025

The board of Delta Air Lines, Inc. (NYSE:DAL) has announced that it will be increasing its dividend by 25% on the 21st of August to $0.1875, up from last year's comparable payment of $0.15. This takes the annual payment to 1.3% of the current stock price, which unfortunately is below what the industry is paying.
We've found 21 US stocks that are forecast to pay a dividend yield of over 6% next year. See the full list for free.
If it is predictable over a long period, even low dividend yields can be attractive. However, Delta Air Lines' earnings easily cover the dividend. This means that most of what the business earns is being used to help it grow.
Over the next year, EPS is forecast to expand by 30.7%. If the dividend continues on this path, the payout ratio could be 8.5% by next year, which we think can be pretty sustainable going forward.
See our latest analysis for Delta Air Lines
Although the company has a long dividend history, it has been cut at least once in the last 10 years. The annual payment during the last 10 years was $0.36 in 2015, and the most recent fiscal year payment was $0.60. This implies that the company grew its distributions at a yearly rate of about 5.2% over that duration. We like to see dividends have grown at a reasonable rate, but with at least one substantial cut in the payments, we're not certain this dividend stock would be ideal for someone intending to live on the income.
Growing earnings per share could be a mitigating factor when considering the past fluctuations in the dividend. Delta Air Lines hasn't seen much change in its earnings per share over the last five years. While growth may be thin on the ground, Delta Air Lines could always pay out a higher proportion of earnings to increase shareholder returns.
Overall, this is a reasonable dividend, and it being raised is an added bonus. While the payout ratios are a good sign, we are less enthusiastic about the company's dividend record. The dividend looks okay, but there have been some issues in the past, so we would be a little bit cautious.
Market movements attest to how highly valued a consistent dividend policy is compared to one which is more unpredictable. Meanwhile, despite the importance of dividend payments, they are not the only factors our readers should know when assessing a company. For example, we've picked out 2 warning signs for Delta Air Lines that investors should know about before committing capital to this stock. Looking for more high-yielding dividend ideas? Try our collection of strong dividend payers.
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