SS&C Technologies Holdings (NASDAQ:SSNC) Has Announced A Dividend Of $0.20

SS&C Technologies Holdings, Inc.'s (NASDAQ:SSNC) investors are due to receive a payment of $0.20 per share on 15th of June. The dividend yield is 1.4% based on this payment, which is a little bit low compared to the other companies in the industry.

View our latest analysis for SS&C Technologies Holdings

SS&C Technologies Holdings' Earnings Easily Cover The Distributions

It would be nice for the yield to be higher, but we should also check if higher levels of dividend payment would be sustainable. However, prior to this announcement, SS&C Technologies Holdings' dividend was comfortably covered by both cash flow and earnings. This means that most of its earnings are being retained to grow the business.

Looking forward, earnings per share is forecast to rise by 58.2% over the next year. If the dividend continues along recent trends, we estimate the payout ratio will be 25%, which is in the range that makes us comfortable with the sustainability of the dividend.

SS&C Technologies Holdings Doesn't Have A Long Payment History

SS&C Technologies Holdings' dividend has been pretty stable for a little while now, but we will continue to be cautious until it has been demonstrated for a few more years. Since 2015, the annual payment back then was $0.25, compared to the most recent full-year payment of $0.80. This works out to be a compound annual growth rate (CAGR) of approximately 16% a year over that time. We're not overly excited about the relatively short history of dividend payments, however the dividend is growing at a nice rate and we might take a closer look.

We Could See SS&C Technologies Holdings' Dividend Growing

Some investors will be chomping at the bit to buy some of the company's stock based on its dividend history. It's encouraging to see that SS&C Technologies Holdings has been growing its earnings per share at 8.5% a year over the past five years. A low payout ratio and decent growth suggests that the company is reinvesting well, and it also has plenty of room to increase the dividend over time.

We Really Like SS&C Technologies Holdings' Dividend

Overall, we think that this is a great income investment, and we think that maintaining the dividend this year may have been a conservative choice. The company is easily earning enough to cover its dividend payments and it is great to see that these earnings are being translated into cash flow. All in all, this checks a lot of the boxes we look for when choosing an income stock.

Companies possessing a stable dividend policy will likely enjoy greater investor interest than those suffering from a more inconsistent approach. At the same time, there are other factors our readers should be conscious of before pouring capital into a stock. For example, we've picked out 1 warning sign for SS&C Technologies Holdings that investors should know about before committing capital to this stock. Is SS&C Technologies Holdings not quite the opportunity you were looking for? Why not check out our selection of top dividend stocks.

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