FactSet Research Systems Inc. (NYSE:FDS) Passed Our Checks, And It's About To Pay A US$0.82 Dividend

By
Simply Wall St
Published
February 21, 2022
NYSE:FDS
Source: Shutterstock

FactSet Research Systems Inc. (NYSE:FDS) is about to trade ex-dividend in the next 3 days. The ex-dividend date is one business day before a company's record date, which is the date on which the company determines which shareholders are entitled to receive a dividend. The ex-dividend date is important as the process of settlement involves two full business days. So if you miss that date, you would not show up on the company's books on the record date. In other words, investors can purchase FactSet Research Systems' shares before the 25th of February in order to be eligible for the dividend, which will be paid on the 17th of March.

The company's next dividend payment will be US$0.82 per share. Last year, in total, the company distributed US$3.28 to shareholders. Based on the last year's worth of payments, FactSet Research Systems has a trailing yield of 0.8% on the current stock price of $403.01. Dividends are an important source of income to many shareholders, but the health of the business is crucial to maintaining those dividends. That's why we should always check whether the dividend payments appear sustainable, and if the company is growing.

View our latest analysis for FactSet Research Systems

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. That's why it's good to see FactSet Research Systems paying out a modest 30% of its earnings.

Generally speaking, the lower a company's payout ratios, the more resilient its dividend usually is.

Click here to see the company's payout ratio, plus analyst estimates of its future dividends.

historic-dividend
NYSE:FDS Historic Dividend February 21st 2022

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. Investors love dividends, so if earnings fall and the dividend is reduced, expect a stock to be sold off heavily at the same time. With that in mind, we're encouraged by the steady growth at FactSet Research Systems, with earnings per share up 5.3% on average over the last five years.

Another key way to measure a company's dividend prospects is by measuring its historical rate of dividend growth. In the last 10 years, FactSet Research Systems has lifted its dividend by approximately 12% a year on average. It's encouraging to see the company lifting dividends while earnings are growing, suggesting at least some corporate interest in rewarding shareholders.

To Sum It Up

Should investors buy FactSet Research Systems for the upcoming dividend? FactSet Research Systems has seen its earnings per share grow slowly in recent years, and the company reinvests more than half of its profits in the business, which generally bodes well for its future prospects. We think this is a pretty attractive combination, and would be interested in investigating FactSet Research Systems more closely.

Curious what other investors think of FactSet Research Systems? See what analysts are forecasting, with this visualisation of its historical and future estimated earnings and cash flow.

If you're in the market for strong dividend payers, we recommend checking our selection of top dividend stocks.

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