Global Payments (NYSE:GPN) Is Paying Out A Dividend Of $0.25

Global Payments Inc.'s (NYSE:GPN) investors are due to receive a payment of $0.25 per share on 27th of June. The dividend yield will be 1.3% based on this payment which is still above the industry average.

Our free stock report includes 1 warning sign investors should be aware of before investing in Global Payments. Read for free now.

Global Payments' Projected Earnings Seem Likely To Cover Future Distributions

While it is great to have a strong dividend yield, we should also consider whether the payment is sustainable. However, Global Payments' earnings easily cover the dividend. This means that most of what the business earns is being used to help it grow.

Looking forward, earnings per share is forecast to rise by 40.5% over the next year. If the dividend continues on this path, the payout ratio could be 14% by next year, which we think can be pretty sustainable going forward.

Check out our latest analysis for Global Payments

Dividend Volatility

Although the company has a long dividend history, it has been cut at least once in the last 10 years. The annual payment during the last 10 years was $0.04 in 2015, and the most recent fiscal year payment was $1.00. This means that it has been growing its distributions at 38% per annum over that time. Dividends have grown rapidly over this time, but with cuts in the past we are not certain that this stock will be a reliable source of income in the future.

The Dividend Looks Likely To Grow

Growing earnings per share could be a mitigating factor when considering the past fluctuations in the dividend. Global Payments has seen EPS rising for the last five years, at 27% per annum. Earnings per share is growing at a solid clip, and the payout ratio is low which we think is an ideal combination in a dividend stock as the company can quite easily raise the dividend in the future.

Global Payments Looks Like A Great Dividend Stock

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 of these factors considered, we think this has solid potential as a dividend stock.

Companies possessing a stable dividend policy will likely enjoy greater investor interest than those suffering from a more inconsistent approach. However, there are other things to consider for investors when analysing stock performance. For instance, we've picked out 1 warning sign for Global Payments that investors should take into consideration. Is Global Payments not quite the opportunity you were looking for? Why not check out our selection of top dividend stocks.

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