Jarvis Securities plc (LON:JIM) Looks Interesting, And It's About To Pay A Dividend

Jarvis Securities plc (LON:JIM) is about to trade ex-dividend in the next 4 days. Ex-dividend means that investors that purchase the stock on or after the 25th of February will not receive this dividend, which will be paid on the 18th of March.

Jarvis Securities's next dividend payment will be UK£0.03 per share, and in the last 12 months, the company paid a total of UK£0.11 per share. Last year's total dividend payments show that Jarvis Securities has a trailing yield of 5.1% on the current share price of £2.15. If you buy this business for its dividend, you should have an idea of whether Jarvis Securities's dividend is reliable and sustainable. We need to see whether the dividend is covered by earnings and if it's growing.

View our latest analysis for Jarvis Securities

Dividends are typically paid out of company income, so if a company pays out more than it earned, its dividend is usually at a higher risk of being cut. Jarvis Securities paid out more than half (70%) of its earnings last year, which is a regular payout ratio for most companies.

Companies that pay out less in dividends than they earn in profits generally have more sustainable dividends. The lower the payout ratio, the more wiggle room the business has before it could be forced to cut the dividend.

Click here to see how much of its profit Jarvis Securities paid out over the last 12 months.

Have Earnings And Dividends Been Growing?

Companies with consistently growing earnings per share generally make the best dividend stocks, as they usually find it easier to grow dividends per share. If earnings fall far enough, the company could be forced to cut its dividend. Fortunately for readers, Jarvis Securities's earnings per share have been growing at 14% a year 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 last 10 years, Jarvis Securities has lifted its dividend by approximately 19% a year on average. It's great to see earnings per share growing rapidly over several years, and dividends per share growing right along with it.

The Bottom Line

Is Jarvis Securities worth buying for its dividend? Earnings per share are growing nicely, and Jarvis Securities is paying out a percentage of its earnings that is around the average for dividend-paying stocks. Overall, Jarvis Securities looks like a promising dividend stock in this analysis, and we think it would be worth investigating further.

In light of that, while Jarvis Securities has an appealing dividend, it's worth knowing the risks involved with this stock. For example, we've found 3 warning signs for Jarvis Securities (1 is concerning!) that deserve your attention before investing in the shares.

If you're in the market for dividend stocks, we recommend checking our list of top dividend stocks with a greater than 2% yield and an upcoming dividend.

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This article by Simply Wall St is general in nature. 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.
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