There's A Lot To Like About TMX Group Limited's (TSE:X) Upcoming CA$0.66 Dividend

TMX Group Limited (TSE:X) is about to trade ex-dividend in the next 4 days. This means that investors who purchase shares on or after the 27th of February will not receive the dividend, which will be paid on the 13th of March.

TMX Group's next dividend payment will be CA$0.66 per share, and in the last 12 months, the company paid a total of CA$2.64 per share. Looking at the last 12 months of distributions, TMX Group has a trailing yield of approximately 2.3% on its current stock price of CA$116.38. We love seeing companies pay a dividend, but it's also important to be sure that laying the golden eggs isn't going to kill our golden goose! So we need to check whether the dividend payments are covered, and if earnings are growing.

See our latest analysis for TMX Group

If a company pays out more in dividends than it earned, then the dividend might become unsustainable - hardly an ideal situation. TMX Group is paying out an acceptable 57% of its profit, a common payout level among most companies.

Generally speaking, the lower a company's payout ratios, the more resilient its dividend usually is.

Click here to see the company's payout ratio, plus analyst estimates of its future dividends.

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 business enters a downturn and the dividend is cut, the company could see its value fall precipitously. Fortunately for readers, TMX Group's earnings per share have been growing at 19% 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. Since the start of our data, seven years ago, TMX Group has lifted its dividend by approximately 7.4% a year on average. We're glad to see dividends rising alongside earnings over a number of years, which may be a sign the company intends to share the growth with shareholders.

The Bottom Line

Has TMX Group got what it takes to maintain its dividend payments? Earnings per share are growing at an attractive rate, and TMX Group is paying out a bit over half its profits. TMX 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.

Ever wonder what the future holds for TMX Group? See what the seven 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.

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