Wyndham Worldwide's Dividend Stream Is Undervalued

A dividend is just one of many ways a company can reward its shareholders by paying them out in cash. The investor can then choose to take the cash and run, reinvest it in the company, or invest it in a different company. After a company has made their net income for the quarter, they have the choice of what to do with it and the choices are usually to either plow the money back into the business for other investments or pay some of that money back to the shareholders in the form of a dividend.
Most Recent Dividend Announcement
Wyndham Worldwide (NYSE: WYN) recently announced a quarterly dividend of $0.58 per share with an ex-dividend which was set for May 24th, making the must-own date May 23rd if you want to get paid the dividend. This dividend announcement is in line with what was announced the previous quarter and will be paid to shareholders on June 9th. The dividend is currently good for a 2.4% yield on today's share price of $95.99. Based on estimated forward earnings, the dividend is good for a payout ratio of 33.3%, which is pretty great. From a cash flow perspective, the company has paid $227M in dividends over the past 12 months on operating cash flow of $950M, which is good for a 23.9% operating cash flow payout ratio.

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Potential Future Dividends
The company has been increasing its dividend for a long time, so there is lots of history to give investors a warm-fuzzy feeling. Earnings growth projections for the company are below... Read more

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