There's A Lot To Like About B.P. Marsh & Partners' (LON:BPM) Upcoming UK£0.0808 Dividend

B.P. Marsh & Partners PLC (LON:BPM) stock is about to trade ex-dividend in three days. The ex-dividend date is usually set to be two business days before the record date, which is the cut-off date on which you must be present on the company's books as a shareholder in order to receive the dividend. The ex-dividend date is of consequence because whenever a stock is bought or sold, the trade can take two business days or more to settle. Meaning, you will need to purchase B.P. Marsh & Partners' shares before the 1st of May to receive the dividend, which will be paid on the 30th of May.

The company's next dividend payment will be UK£0.0808 per share. Last year, in total, the company distributed UK£0.08 to shareholders. Based on the last year's worth of payments, B.P. Marsh & Partners stock has a trailing yield of around 1.9% on the current share price of UK£7.00. Dividends are a major contributor to investment returns for long term holders, but only if the dividend continues to be paid. That's why we should always check whether the dividend payments appear sustainable, and if the company is growing.

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Dividends are usually paid out of company profits, so if a company pays out more than it earned then its dividend is usually at greater risk of being cut. B.P. Marsh & Partners has a low and conservative payout ratio of just 8.5% of its income after tax.

When a company paid out less in dividends than it earned in profit, this generally suggests its dividend is affordable. The lower the % of its profit that it pays out, the greater the margin of safety for the dividend if the business enters a downturn.

Check out our latest analysis for B.P. Marsh & Partners

Click here to see how much of its profit B.P. Marsh & Partners paid out over the last 12 months.

Have Earnings And Dividends Been Growing?

Stocks in companies that generate sustainable earnings growth often make the best dividend prospects, as it is easier to lift the dividend when earnings are rising. If earnings fall far enough, the company could be forced to cut its dividend. That's why it's comforting to see B.P. Marsh & Partners's earnings have been skyrocketing, up 31% per annum for the past five years.

The main way most investors will assess a company's dividend prospects is by checking the historical rate of dividend growth. In the past 10 years, B.P. Marsh & Partners has increased its dividend at approximately 17% a year on average. Both per-share earnings and dividends have both been growing rapidly in recent times, which is great to see.

Final Takeaway

Has B.P. Marsh & Partners got what it takes to maintain its dividend payments? Companies like B.P. Marsh & Partners that are growing rapidly and paying out a low fraction of earnings, are usually reinvesting heavily in their business. Perhaps even more importantly - this can sometimes signal management is focused on the long term future of the business. In summary, B.P. Marsh & Partners appears to have some promise as a dividend stock, and we'd suggest taking a closer look at it.

Want to learn more about B.P. Marsh & Partners's dividend performance? Check out this visualisation of its historical revenue and earnings growth.

If you're in the market for strong dividend payers, we recommend checking our selection of top dividend stocks.

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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.