Richards Packaging Income Fund (TSE:RPI.UN) Is Paying Out A Dividend Of CA$0.11

The board of Richards Packaging Income Fund (TSE:RPI.UN) has announced that it will pay a dividend on the 14th of February, with investors receiving CA$0.11 per share. The dividend yield will be 3.8% based on this payment which is still above the industry average.

View our latest analysis for Richards Packaging Income Fund

Richards Packaging Income Fund's Payment Has Solid Earnings Coverage

A big dividend yield for a few years doesn't mean much if it can't be sustained. However, prior to this announcement, Richards Packaging Income Fund's dividend was comfortably covered by both cash flow and earnings. As a result, a large proportion of what it earned was being reinvested back into the business.

The next year is set to see EPS grow by 2.8%. If the dividend continues on this path, the payout ratio could be 51% by next year, which we think can be pretty sustainable going forward.

Richards Packaging Income Fund Has A Solid Track Record

The company has a sustained record of paying dividends with very little fluctuation. The annual payment during the last 10 years was CA$0.786 in 2014, and the most recent fiscal year payment was CA$1.32. This means that it has been growing its distributions at 5.3% per annum over that time. Dividends have grown at a reasonable rate over this period, and without any major cuts in the payment over time, we think this is an attractive combination as it provides a nice boost to shareholder returns.

The Dividend Looks Likely To Grow

Investors could be attracted to the stock based on the quality of its payment history. It's encouraging to see that Richards Packaging Income Fund has been growing its earnings per share at 15% a year over the past five years. Richards Packaging Income Fund definitely has the potential to grow its dividend in the future with earnings on an uptrend and a low payout ratio.

Richards Packaging Income Fund Looks Like A Great Dividend Stock

Overall, we like to see the dividend staying consistent, and we think Richards Packaging Income Fund might even raise payments in the future. Distributions are quite easily covered by earnings, which are also being converted to cash flows. Taking this all into consideration, this looks like it could be a good dividend opportunity.

Companies possessing a stable dividend policy will likely enjoy greater investor interest than those suffering from a more inconsistent approach. However, there are other things to consider for investors when analysing stock performance. See if management have their own wealth at stake, by checking insider shareholdings in Richards Packaging Income Fund stock. Is Richards Packaging Income Fund not quite the opportunity you were looking for? Why not check out our selection of top dividend stocks.

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