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Why Is Eastman Chemical’s Dividend Yield Rising?

Peter Neil - Author

Jun. 1 2017, Updated 9:09 a.m. ET

Eastman Chemical’s 2Q17 dividend

On May 4, 2017, Eastman Chemical (EMN) declared its 2Q17 dividend of $0.51 per share on its outstanding common stock. The dividend will be payable on July 5, 2017, to shareholders of record on June 15, 2017. Eastman Chemical’s 2Q17 dividend of $0.51 per share is 10.8% higher than the dividend paid in 2Q16.

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Dividend growth

Eastman Chemical’s dividend growth has a positive influence on its dividend yield. Its dividend growth is higher than its price growth. As of May 30, 2017, Eastman Chemical’s stock price closed at $79.96. With Eastman Chemical declaring a quarterly dividend of $0.51 per share, its current dividend yield stands at 2.6%. Peers Dow Chemical (DOW), DuPont (DD), and LyondellBasell’s (LYB) current dividend yields are 3.0%, 2.5%, and 4.4%, respectively.

Since 2013, Eastman Chemical’s dividend yield rose from 1.7% to 2.6%. Its dividend yield is higher than the one-year Treasury yield. As a result, it’s an attractive investment option.

Dividend payout

A company’s dividend payout can be calculated by dividing annual dividends per share by annual earnings per share. It’s expressed as a percentage. The dividend payout tells investors what percentage of earnings the company is paying out as a dividend.

From 2011 to 2016, Eastman Chemical’s dividend payout has been 21%–32%. Its dividend payout has shown a rising trend, which is a good sign for investors. At the same time, Eastman Chemical’s better retention rate will help the company have more cash for future growth. In 1Q17, the company’s dividend payout stood at 27.9%.

Notably, investors can indirectly hold Eastman Chemical by investing in the First Trust Indxx Global Agriculture ETF (FTAG), which had 9.6% of its holdings in Eastman Chemical on May 30, 2017.

In the next part, we’ll examine analysts’ latest ratings for Eastman Chemical.


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