Read This Before Buying The Vitec Group plc (LON:VTC) For Its Upcoming £0.2 Dividend

Attention dividend hunters! The Vitec Group plc (LSE:VTC) will be distributing its dividend of £0.2 per share on the 18 May 2018, and will start trading ex-dividend in 6 days time on the 19 April 2018. Is this future income stream a compelling catalyst for dividend investors to think about the stock as an investment today? Let's take a look at Vitec Group's most recent financial data to examine its dividend characteristics in more detail. See our latest analysis for Vitec Group

5 checks you should use to assess a dividend stock

If you are a dividend investor, you should always assess these five key metrics:

• Is its annual yield among the top 25% of dividend-paying companies?
• Has it consistently paid a stable dividend without missing a payment or drastically cutting payout?
• Has the amount of dividend per share grown over the past?
• Is its earnings sufficient to payout dividend at the current rate?
• Will it have the ability to keep paying its dividends going forward?

How does Vitec Group fare?

The company currently pays out 130.13% of its earnings as a dividend, according to its trailing twelve-month data, meaning the dividend is not sufficiently covered by its earnings. However, going forward, analysts expect VTC's payout to fall into a more sustainable range of 38.36% of its earnings, which leads to a dividend yield of 2.91%. In addition to this, EPS should increase to £0.67, meaning that the lower payout ratio does not necessarily implicate a lower dividend payment. If there is one thing that you want to be reliable in your life, it's dividend stocks and their constant income stream. VTC has increased its DPS from £0.18 to £0.31 in the past 10 years. It has also been paying out dividend consistently during this time, as you'd expect for a company increasing its dividend levels. These are all positive signs of a great, reliable dividend stock. In terms of its peers, Vitec Group generates a yield of 2.56%, which is on the low-side for Consumer Durables stocks.

Next Steps:

With this in mind, I definitely rank Vitec Group as a strong dividend stock, and makes it worth further research for anyone who likes steady income generation from their portfolio. Given that this is purely a dividend analysis, you should always research extensively before deciding whether or not a stock is an appropriate investment for you. I always recommend analysing the company's fundamentals and underlying business before making an investment decision. I've put together three essential aspects you should further examine:

1. Future Outlook: What are well-informed industry analysts predicting for VTC’s future growth? Take a look at our free research report of analyst consensus for VTC’s outlook.
2. Valuation: What is VTC worth today? Even if the stock is a cash cow, it's not worth an infinite price. The intrinsic value infographic in our free research report helps visualize whether VTC is currently mispriced by the market.
3. Other Dividend Rockstars: Are there better dividend payers with stronger fundamentals out there? Check out our free list of these great stocks here.

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

Simply Wall St analyst Simply Wall St and Simply Wall St have no position in any of the companies mentioned. This article 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.