Intercontinental Exchange (NYSE:ICE) Is Due To Pay A Dividend Of $0.48

The board of Intercontinental Exchange, Inc. (NYSE:ICE) has announced that it will pay a dividend on the 30th of June, with investors receiving $0.48 per share. Despite this raise, the dividend yield of 1.1% is only a modest boost to shareholder returns.

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Intercontinental Exchange's Future Dividend Projections Appear Well Covered By Earnings

The dividend yield is a little bit low, but sustainability of the payments is also an important part of evaluating an income stock. Before making this announcement, Intercontinental Exchange 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 42.4% over the next year. Assuming the dividend continues along recent trends, we think the payout ratio could be 31% by next year, which is in a pretty sustainable range.

View our latest analysis for Intercontinental Exchange

Intercontinental Exchange Has A Solid Track Record

The company has been paying a dividend for a long time, and it has been quite stable which gives us confidence in the future dividend potential. The annual payment during the last 10 years was $0.52 in 2015, and the most recent fiscal year payment was $1.92. This implies that the company grew its distributions at a yearly rate of about 14% over that duration. 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.

The Dividend Has Growth Potential

The company's investors will be pleased to have been receiving dividend income for some time. We are encouraged to see that Intercontinental Exchange has grown earnings per share at 6.8% per year over the past five years. With a decent amount of growth and a low payout ratio, we think this bodes well for Intercontinental Exchange's prospects of growing its dividend payments in the future.

We Really Like Intercontinental Exchange's Dividend

In summary, it is always positive to see the dividend being increased, and we are particularly pleased with its overall sustainability. Earnings are easily covering distributions, and the company is generating plenty of cash. Taking this all into consideration, this looks like it could be a good dividend opportunity.

Market movements attest to how highly valued a consistent dividend policy is compared to one which is more unpredictable. Meanwhile, despite the importance of dividend payments, they are not the only factors our readers should know when assessing a company. Taking the debate a bit further, we've identified 2 warning signs for Intercontinental Exchange that investors need to be conscious of moving forward. Is Intercontinental Exchange not quite the opportunity you were looking for? Why not check out our selection of top dividend stocks.

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