Jamieson Wellness (TSE:JWEL) Will Pay A Larger Dividend Than Last Year At CA$0.17

The board of Jamieson Wellness Inc. (TSE:JWEL) has announced that it will be paying its dividend of CA$0.17 on the 15th of September, an increased payment from last year's comparable dividend. This takes the annual payment to 1.8% of the current stock price, which is about average for the industry.

See our latest analysis for Jamieson Wellness

Jamieson Wellness' Dividend Is Well Covered By Earnings

We like a dividend to be consistent over the long term, so checking whether it is sustainable is important. Based on the last payment, Jamieson Wellness was quite comfortably earning enough to cover the dividend. This indicates that quite a large proportion of earnings is being invested back into the business.

Looking forward, earnings per share is forecast to rise by 94.6% over the next year. Assuming the dividend continues along recent trends, we think the payout ratio could be 30% by next year, which is in a pretty sustainable range.

Jamieson Wellness Is Still Building Its Track Record

Jamieson Wellness' dividend has been pretty stable for a little while now, but we will continue to be cautious until it has been demonstrated for a few more years. The annual payment during the last 5 years was CA$0.32 in 2017, and the most recent fiscal year payment was CA$0.68. This means that it has been growing its distributions at 16% per annum over that time. We're not overly excited about the relatively short history of dividend payments, however the dividend is growing at a nice rate and we might take a closer look.

The Dividend Looks Likely To Grow

Some investors will be chomping at the bit to buy some of the company's stock based on its dividend history. It's encouraging to see that Jamieson Wellness has been growing its earnings per share at 97% a year over the past five years. Jamieson Wellness is clearly able to grow rapidly while still returning cash to shareholders, positioning it to become a strong dividend payer in the future.

We Really Like Jamieson Wellness' Dividend

Overall, a dividend increase is always good, and we think that Jamieson Wellness is a strong income stock thanks to its track record and growing earnings. The company is easily earning enough to cover its dividend payments and it is great to see that these earnings are being translated into cash flow. All of these factors considered, we think this has solid potential as a dividend stock.

Investors generally tend to favour companies with a consistent, stable dividend policy as opposed to those operating an irregular one. Still, investors need to consider a host of other factors, apart from dividend payments, when analysing a company. As an example, we've identified 2 warning signs for Jamieson Wellness that you should be aware of before investing. Is Jamieson Wellness not quite the opportunity you were looking for? Why not check out our selection of top dividend stocks.

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