Maximus (NYSE:MMS) Has Announced A Dividend Of $0.30

Maximus, Inc. (NYSE:MMS) has announced that it will pay a dividend of $0.30 per share on the 31st of May. This payment means that the dividend yield will be 1.8%, which is around the industry average.

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Maximus' Future Dividend Projections Appear Well Covered By Earnings

We like a dividend to be consistent over the long term, so checking whether it is sustainable is important. However, Maximus' earnings easily cover the dividend. This means that most of what the business earns is being used to help it grow.

Over the next year, EPS is forecast to expand by 7.9%. If the dividend continues on this path, the payout ratio could be 26% by next year, which we think can be pretty sustainable going forward.

See our latest analysis for Maximus

Maximus Has A Solid Track Record

The company has an extended history of paying stable dividends. The dividend has gone from an annual total of $0.18 in 2015 to the most recent total annual payment of $1.20. This means that it has been growing its distributions at 21% per annum over that time. We can see that payments have shown some very nice upward momentum without faltering, which provides some reassurance that future payments will also be reliable.

Maximus Could Grow Its Dividend

Investors who have held shares in the company for the past few years will be happy with the dividend income they have received. Maximus has impressed us by growing EPS at 5.8% per year over the past five years. Maximus definitely has the potential to grow its dividend in the future with earnings on an uptrend and a low payout ratio.

Maximus Looks Like A Great Dividend Stock

Overall, we like to see the dividend staying consistent, and we think Maximus might even raise payments in the future. 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 of these factors considered, we think this has solid potential as a dividend stock.

Investors generally tend to favour companies with a consistent, stable dividend policy as opposed to those operating an irregular one. Still, investors need to consider a host of other factors, apart from dividend payments, when analysing a company. For example, we've picked out 2 warning signs for Maximus that investors should know about before committing capital to this stock. If you are a dividend investor, you might also want to look at our curated list of high yield 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.