Is Weyco Group, Inc. (WEYS) the Best Debt-Free Dividend Stock to Invest In?

Weyco Group, Inc. (WEYS) has been making waves in the dividend investment scene with its consistent and growing dividend payouts. But is it the best debt-free dividend stock to invest in? Let's dive into the data and find out.



Weyco Group has a rich history of paying dividends, with a current yield of 2.83% and a payout ratio of 299.34%. The company has consistently paid a quarterly dividend, with the payout amount remaining relatively stable over the years. In 2024, the company paid a special dividend of $2.00 per share in addition to the regular quarterly dividend. This consistency and growth in dividends are attractive features for income-oriented investors.

However, when comparing Weyco Group's dividend yield and payout ratio to its peers and industry benchmarks, we find that the company's dividend yield is lower than the historical average of 8.25%. While this may seem concerning, it is still competitive within the sector. The high payout ratio indicates that the company is distributing a significant portion of its earnings as dividends, which is unusual for a company with a stable dividend payout history. This could be a sign of strong cash flow generation or a strategy to attract income-oriented investors.

To assess the sustainability of Weyco Group's current dividend policy, we can consider several factors. First, the company's dividend is well-covered by its earnings, with a dividend coverage ratio of 2.8 times. This indicates a healthy level of dividend sustainability. Additionally, Weyco Group has generated positive operating cash flow, which has contributed to its ability to pay and grow dividends. In 2023, the company's operating cash flow was $22.1 million, which was more than sufficient to cover its dividend payments.

Weyco Group's financial health is strong, with a debt-to-equity ratio of 0.17 and liquidity ratios (current ratio and quick ratio) of 2.45 and 1.89, respectively, in 2023. These metrics indicate that the company has a solid financial foundation to support its dividend policy.



In conclusion, Weyco Group, Inc. (WEYS) is an attractive option for income-oriented investors, with a consistent and growing dividend history, strong financial health, and a competitive dividend yield within its sector. While the company's dividend yield is lower than its historical average, it is still competitive and well-covered by earnings. The high payout ratio suggests strong cash flow generation or a strategy to attract income-oriented investors. However, it is essential to monitor the company's financial performance and cash flow generation to ensure the continued sustainability of its dividend policy.