Partners Group Holding (VTX:PGHN) Has Announced That It Will Be Increasing Its Dividend To CHF37.00

Partners Group Holding AG (VTX:PGHN) will increase its dividend on the 31st of May to CHF37.00, which is 12% higher than last year's payment from the same period of CHF33.00. This takes the annual payment to 4.0% of the current stock price, which is about average for the industry.

View our latest analysis for Partners Group Holding

Partners Group Holding's Payment Has Solid Earnings Coverage

We aren't too impressed by dividend yields unless they can be sustained over time. Prior to this announcement, Partners Group Holding was quite comfortably covering its dividend with earnings and it was paying more than 75% of its free cash flow to shareholders. The company is clearly earning enough to pay this type of dividend, but it is definitely focused on returning cash to shareholders, rather than growing the business.

Earnings per share is forecast to rise by 37.8% over the next year. If recent patterns in the dividend continues, the payout ratio in 12 months could be 81% which is a bit high but can definitely be sustainable.

Partners Group Holding Has A Solid Track Record

The company has an extended history of paying stable dividends. Since 2013, the annual payment back then was CHF6.25, compared to the most recent full-year payment of CHF33.00. This works out to be a compound annual growth rate (CAGR) of approximately 18% a year over that time. It is good to see that there has been strong dividend growth, and that there haven't been any cuts for a long time.

The Dividend Has Growth Potential

Investors could be attracted to the stock based on the quality of its payment history. We are encouraged to see that Partners Group Holding has grown earnings per share at 6.3% per year over the past five years. Since earnings per share is growing at an acceptable rate, and the payout policy is balanced, we think the company is positioning itself well to grow earnings and dividends in the future.

Our Thoughts On Partners Group Holding's Dividend

Overall, this is probably not a great income stock, even though the dividend is being raised at the moment. While Partners Group Holding is earning enough to cover the dividend, we are generally unimpressed with its future prospects. This company is not in the top tier of income providing stocks.

Companies possessing a stable dividend policy will likely enjoy greater investor interest than those suffering from a more inconsistent approach. At the same time, there are other factors our readers should be conscious of before pouring capital into a stock. For instance, we've picked out 1 warning sign for Partners Group Holding that investors should take into consideration. Looking for more high-yielding dividend ideas? Try our collection of strong dividend payers.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.