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

Maximus, Inc.'s (NYSE:MMS) investors are due to receive a payment of $0.30 per share on 28th of February. Based on this payment, the dividend yield will be 1.5%, which is fairly typical for the industry.

Check out our latest analysis for Maximus

Maximus' Payment Could Potentially Have Solid Earnings Coverage

Unless the payments are sustainable, the dividend yield doesn't mean too much. Before making this announcement, Maximus was easily earning enough to cover the dividend. As a result, a large proportion of what it earned was being reinvested back into the business.

Looking forward, earnings per share is forecast to rise by 1.6% over the next year. If the dividend continues along recent trends, we estimate the payout ratio will be 28%, which is in the range that makes us comfortable with the sustainability of the dividend.

Maximus Has A Solid Track Record

The company has an extended history of paying stable dividends. The annual payment during the last 10 years was $0.18 in 2015, and the most recent fiscal year payment was $1.20. This works out to be a compound annual growth rate (CAGR) of approximately 21% a year over that time. So, dividends have been growing pretty quickly, and even more impressively, they haven't experienced any notable falls during this period.

We Could See Maximus' Dividend Growing

The company's investors will be pleased to have been receiving dividend income for some time. It's encouraging to see that Maximus has been growing its earnings per share at 6.4% a year over the past five years. With a decent amount of growth and a low payout ratio, we think this bodes well for Maximus' prospects of growing its dividend payments in the future.

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. Earnings are easily covering distributions, and the company is generating plenty of cash. All in all, this checks a lot of the boxes we look for when choosing an income stock.

Investors generally tend to favour companies with a consistent, stable dividend policy as opposed to those operating an irregular one. Meanwhile, despite the importance of dividend payments, they are not the only factors our readers should know when assessing a company. For instance, we've picked out 1 warning sign for Maximus that investors should take into consideration. Is Maximus not quite the opportunity you were looking for? Why not check out 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.