Resources Connection (NASDAQ:RGP) Will Pay A Dividend Of $0.14

Resources Connection, Inc.'s (NASDAQ:RGP) investors are due to receive a payment of $0.14 per share on 14th of March. Based on this payment, the dividend yield on the company's stock will be 4.2%, which is an attractive boost to shareholder returns.

See our latest analysis for Resources Connection

Resources Connection's Dividend Is Well Covered By Earnings

Impressive dividend yields are good, but this doesn't matter much if the payments can't be sustained. The last dividend was quite easily covered by Resources Connection's earnings. This indicates that a lot of the earnings are being reinvested into the business, with the aim of fueling growth.

The next year is set to see EPS grow by 69.5%. Assuming the dividend continues along recent trends, we think the payout ratio could be 44% by next year, which is in a pretty sustainable range.

Resources Connection Has A Solid Track Record

The company has an extended history of paying stable dividends. Since 2014, the annual payment back then was $0.24, compared to the most recent full-year payment of $0.56. This means that it has been growing its distributions at 8.8% per annum over that time. The dividend has been growing very nicely for a number of years, and has given its shareholders some nice income in their portfolios.

Resources Connection May Find It Hard To Grow The Dividend

Investors could be attracted to the stock based on the quality of its payment history. Resources Connection hasn't seen much change in its earnings per share over the last five years. The company has been growing at a pretty soft 0.3% per annum, and is paying out quite a lot of its earnings to shareholders. While this isn't necessarily a negative, it definitely signals that dividend growth could be constrained in the future unless earnings start to pick up again.

Resources Connection Looks Like A Great Dividend Stock

Overall, we like to see the dividend staying consistent, and we think Resources Connection might even raise payments in the future. Earnings are easily covering distributions, and the company is generating plenty of cash. Taking this all into consideration, this looks like it could be a good dividend opportunity.

It's important to note that companies having a consistent dividend policy will generate greater investor confidence than those having an erratic one. Still, investors need to consider a host of other factors, apart from dividend payments, when analysing a company. For instance, we've picked out 1 warning sign for Resources Connection 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.