Readers hoping to buy Charles Stanley Group PLC (LON:CAY) for its dividend will need to make their move shortly, as the stock is about to trade ex-dividend. Investors can purchase shares before the 11th of June in order to be eligible for this dividend, which will be paid on the 16th of July.
Charles Stanley Group’s next dividend payment will be UK£0.06 per share. Last year, in total, the company distributed UK£0.09 to shareholders. Based on the last year’s worth of payments, Charles Stanley Group stock has a trailing yield of around 3.2% on the current share price of £2.8. If you buy this business for its dividend, you should have an idea of whether Charles Stanley Group’s dividend is reliable and sustainable. As a result, readers should always check whether Charles Stanley Group has been able to grow its dividends, or if the dividend might be cut.
If a company pays out more in dividends than it earned, then the dividend might become unsustainable – hardly an ideal situation. That’s why it’s good to see Charles Stanley Group paying out a modest 32% of its earnings.
Companies that pay out less in dividends than they earn in profits generally have more sustainable dividends. The lower the payout ratio, the more wiggle room the business has before it could be forced to cut the dividend.
Have Earnings And Dividends Been Growing?
Businesses with strong growth prospects usually make the best dividend payers, because it’s easier to grow dividends when earnings per share are improving. If earnings decline and the company is forced to cut its dividend, investors could watch the value of their investment go up in smoke. It’s encouraging to see Charles Stanley Group has grown its earnings rapidly, up 52% a year for the past five years.
Another key way to measure a company’s dividend prospects is by measuring its historical rate of dividend growth. Charles Stanley Group’s dividend payments are effectively flat on where they were ten years ago.
Has Charles Stanley Group got what it takes to maintain its dividend payments? Companies like Charles Stanley Group that are growing rapidly and paying out a low fraction of earnings, are usually reinvesting heavily in their 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. Charles Stanley Group ticks a lot of boxes for us from a dividend perspective, and we think these characteristics should mark the company as deserving of further attention.
With that in mind, a critical part of thorough stock research is being aware of any risks that stock currently faces. To help with this, we’ve discovered 2 warning signs for Charles Stanley Group that you should be aware of before investing in their shares.
A common investment mistake is buying the first interesting stock you see. Here you can find a list of promising dividend stocks with a greater than 2% yield and an upcoming dividend.
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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. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Thank you for reading.