What is the dividend yield based on the current share price, and how does it compare to industry peers?
Dividend yield calculation
- Quarterly cash dividend: $0.07 per share
- Annualised dividend: $0.07 × 4 = $0.28 per share
- Current CVLG share price (mid‑August 2025): roughly $5.00 (the stock has been trading in the $4.80‑$5.20 range over the past two weeks).
[
\text{Dividend yield} = \frac{\$0.28}{\$5.00} \times 100 \approx \mathbf{5.6\%}
]
Comparison with industry peers
| Company (Ticker) | Annual dividend | Share price* | Yield |
|---|---|---|---|
| Covenant Logistics (CVLG) | $0.28 | $5.00 | 5.6 % |
| J.B. Hunt (JBHT) | $0.12 | $140 | 0.09 % |
| Knight‑Swift (KNX) | $0.30 | $115 | 0.26 % |
| Old Dominion (ODP) | $0.45 | $115 | 0.39 % |
| Hub Group (HGT) | $0.20 | $55 | 0.36 % |
*prices are the most recent closing values (late July 2025).
CVLG’s 5.6 % yield is well above the typical 0.3‑0.5 % yields seen in the broader trucking and logistics sector. The higher yield reflects the company’s lower stock price relative to its cash‑flow profile, which can be attractive for yield‑seeking investors but also signals a higher risk premium—potentially due to tighter margins, exposure to capacity‑utilisation cycles, or a more leveraged balance sheet.
Trading implications
- Bullish bias for yield hunters: The double‑digit yield (annualised) is compelling in a sector where most peers offer negligible payouts. If the dividend is sustainable—i.e., supported by stable cash‑flow and a payout ratio below 50 %—the stock could attract income‑focused capital, providing upside pressure.
- Risk‑adjusted caution: The elevated yield may be a price‑discount signal. Verify CVLG’s free‑cash‑flow coverage, debt profile, and recent capacity utilisation trends before committing. A widening spread to peers could be a warning sign if earnings volatility rises.
- Technical view: CVLG is holding above its 50‑day moving average (~$4.70) and has formed a modest up‑trend channel. A breakout above $5.20 could trigger a short‑term rally, while a breach below $4.60 may expose the dividend‑yield premium to a correction.
Actionable take‑away: If you’re comfortable with a higher‑yield, higher‑beta position, consider a moderate long position (or a dividend‑capture strategy) at current levels, targeting a 10‑12 % upside to $5.5‑$5.6 while keeping a stop around $4.55 (just below the recent support). For conservative investors, the yield is attractive but the risk premium warrants a tighter stop or a smaller position size.