Herc Holdings (HRI) DIvidends Date & History

Key Takeaways

• Herc Holdings (HRI) offers a trailing dividend yield of 2.8%, paid quarterly at $0.70 per share.
• Annual dividend of $2.80 per share, with consistent increases from $0.575 in 2022 to $0.70 since 2025.
• Dividend growth over five years, though payout ratio exceeds 9,000% due to low reported net EPS of $0.03.
• Strong cash flow coverage with $521 million adjusted free cash flow in 2025, supporting sustainability.
• Higher yield than key peer URI (1.0%), attractive for income in equipment rental sector.
• Net leverage at 3.95x indicates moderate debt amid fleet expansion and acquisitions.

Dividend Overview

Herc Holdings Inc. (HRI), a leading equipment rental company, maintains a quarterly dividend policy, currently distributing $0.70 per share. This equates to an annual payout of $2.80, yielding approximately 2.8% based on recent stock prices around $101. The ex-dividend date for the latest payment was February 18, 2026, with payment on March 4, 2026. While not a high-yield stock exceeding 5%, HRI's dividend profile positions it as a modest income generator with growth potential in the industrials sector. The company has demonstrated commitment to shareholders through steady raises, appealing to investors seeking reliable quarterly income alongside capital appreciation from rental demand.

Dividend History and Growth

Since its spin-off from Hertz in 2016, Herc Holdings has built a consistent dividend track record. Quarterly payments began modestly and have grown steadily: $0.575 per share in 2022, rising to $0.6325 in 2023, $0.665 in 2024, and $0.70 from early 2025 onward. This reflects approximately 10% annualized growth over recent years, with no cuts. The five-year growth streak underscores a strategy prioritizing shareholder returns amid expanding rental revenues, driven by fleet investments and market share gains in construction and industrial segments. Recent declarations, including December 2025's $0.70, affirm ongoing commitment.

Dividend Sustainability and Payout Ratio

Herc Holdings' headline payout ratio appears exceptionally high at over 9,000%, stemming from minimal net income of $1 million ($0.03 diluted EPS) in 2025, likely influenced by depreciation, acquisitions, or non-cash items common in capital-intensive rental businesses. However, sustainability shines through robust cash generation: $299 million free cash flow (FCF) and $521 million adjusted FCF for 2025, comfortably covering the roughly $93 million annual dividend (33.5M shares x $2.80). Net debt stands at $8.1 billion with 3.95x leverage, manageable given $1.8 billion adjusted EBITDA. Earnings coverage may improve with operational efficiencies, supporting long-term viability.

Dividend Compared to Industry Peers

In the equipment rental industry, HRI's 2.8% yield outpaces larger peer United Rentals (URI) at about 1.0% with a 19% payout ratio, reflecting URI's focus on growth over income. Ashtead Group (Sunbelt Rentals' parent), traded as AHT on LSE, offers around 1.5-1.6%. Other industrials like McGrath RentCorp (MGRC) provide higher yields near 3%, but HRI's rate exceeds sector averages (1.5%), making it relatively attractive for dividend seekers in rental services amid cyclical demand.

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Is This Stock Attractive for Dividend Investors?

Herc Holdings (HRI) may appeal to income-oriented investors tolerant of cyclical industrials exposure, given its above-peer 2.8% yield and quarterly payouts backed by strong adjusted cash flows. Those prioritizing dividend growth could note the recent raises and five-year streak, though modest compared to aristocrats. Conservative investors might weigh the high leverage (3.95x) and apparent earnings coverage issues, offset by $521 million adjusted FCF exceeding dividends. Long-term holders in construction/infrastructure themes may value the balance of income and growth potential from fleet expansion. High-yield chasers could find it competitive versus bonds, but volatility from economic sensitivity warrants diversification. Overall, HRI suits balanced dividend portfolios seeking industrials tilt without extreme risk.

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