Charles Stanley Group PLC (LON:CAY) stock is about to trade ex-dividend in 3 days time. You can purchase shares before the 12th of December in order to receive the dividend, which the company will pay on the 17th of January.
Charles Stanley Group’s next dividend payment will be UK£0.03 per share. Last year, in total, the company distributed UK£0.087 to shareholders. Looking at the last 12 months of distributions, Charles Stanley Group has a trailing yield of approximately 2.7% on its current stock price of £3.19. If you buy this business for its dividend, you should have an idea of whether Charles Stanley Group’s dividend is reliable and sustainable. So we need to investigate whether Charles Stanley Group can afford its dividend, and if the dividend could grow.
Check out our latest analysis for Charles Stanley Group
Dividends are typically paid from company earnings. If a company pays more in dividends than it earned in profit, then the dividend could be unsustainable. Fortunately Charles Stanley Group’s payout ratio is modest, at just 39% of profit.
When a company paid out less in dividends than it earned in profit, this generally suggests its dividend is affordable. The lower the % of its profit that it pays out, the greater the margin of safety for the dividend if the business enters a downturn.
Click here to see the company’s payout ratio, plus analyst estimates of its future dividends.
Have Earnings And Dividends Been Growing?
Companies with consistently growing earnings per share generally make the best dividend stocks, as they usually find it easier to grow dividends per share. If business enters a downturn and the dividend is cut, the company could see its value fall precipitously. That’s why it’s comforting to see Charles Stanley Group’s earnings have been skyrocketing, up 30% per annum for the past five years.
Another key way to measure a company’s dividend prospects is by measuring its historical rate of dividend growth. It looks like the Charles Stanley Group dividends are largely the same as they were ten years ago.
The Bottom Line
Is Charles Stanley Group worth buying for its dividend? Typically, companies that are growing rapidly and paying out a low fraction of earnings are keeping the profits for reinvestment in the business. This strategy can add significant value to shareholders over the long term – as long as it’s done without issuing too many new shares. Overall, Charles Stanley Group looks like a promising dividend stock in this analysis, and we think it would be worth investigating further.
Ever wonder what the future holds for Charles Stanley Group? See what the two analysts we track are forecasting, with this visualisation of its historical and future estimated earnings and cash flow
We wouldn’t recommend just buying the first dividend stock you see, though. Here’s a list of interesting dividend stocks with a greater than 2% yield and an upcoming dividend.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.
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