Begbies Traynor Group's (LON:BEG) Dividend Will Be £0.015

The board of Begbies Traynor Group plc (LON:BEG) has announced that it will pay a dividend of £0.015 per share on the 8th of May. This makes the dividend yield 4.0%, which is above the industry average.

This technology could replace computers: discover the 20 stocks are working to make quantum computing a reality.

Begbies Traynor Group's Projected Earnings Seem Likely To Cover Future Distributions

While it is great to have a strong dividend yield, we should also consider whether the payment is sustainable. Prior to this announcement, Begbies Traynor Group's dividend made up quite a large proportion of earnings but only 64% of free cash flows. This leaves plenty of cash for reinvestment into the business.

The next year is set to see EPS grow by 54.9%. Assuming the dividend continues along recent trends, we think the payout ratio could be 50% by next year, which is in a pretty sustainable range.

View our latest analysis for Begbies Traynor Group

Begbies Traynor Group Has A Solid Track Record

The company has an extended history of paying stable dividends. The annual payment during the last 10 years was £0.022 in 2015, and the most recent fiscal year payment was £0.044. This works out to be a compound annual growth rate (CAGR) of approximately 7.2% a year 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

Some investors will be chomping at the bit to buy some of the company's stock based on its dividend history. We are encouraged to see that Begbies Traynor Group has grown earnings per share at 60% per year over the past five years. However, Begbies Traynor Group isn't reinvesting a lot back into the business, so we wonder how quickly it will be able to grow in the future.

We Really Like Begbies Traynor Group's Dividend

Overall, a dividend increase is always good, and we think that Begbies Traynor Group is a strong income stock thanks to its track record and growing earnings. 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. Meanwhile, despite the importance of dividend payments, they are not the only factors our readers should know when assessing a company. For instance, we've picked out 1 warning sign for Begbies Traynor Group that investors should take into consideration. Is Begbies Traynor Group not quite the opportunity you were looking for? Why not check out our selection of top dividend stocks.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.