Janus Henderson Group (NYSE:JHG) Has Announced That It Will Be Increasing Its Dividend To US$0.38

By
Simply Wall St
Published
August 04, 2021
NYSE:JHG
Source: Shutterstock

Janus Henderson Group plc (NYSE:JHG) has announced that it will be increasing its dividend on the 25th of August to US$0.38. This will take the dividend yield to an attractive 3.6%, providing a nice boost to shareholder returns.

Check out our latest analysis for Janus Henderson Group

Janus Henderson Group's Payment Has Solid Earnings Coverage

Impressive dividend yields are good, but this doesn't matter much if the payments can't be sustained. Based on the last payment, Janus Henderson Group was quite comfortably earning enough to cover the dividend. This means that a large portion of its earnings are being retained to grow the business.

Looking forward, earnings per share is forecast to rise by 3.8% over the next year. If the dividend continues along recent trends, we estimate the payout ratio will be 44%, which is in the range that makes us comfortable with the sustainability of the dividend.

historic-dividend
NYSE:JHG Historic Dividend August 4th 2021

Janus Henderson Group Doesn't Have A Long Payment History

The company has maintained a consistent dividend for a few years now, but we would like to see a longer track record before relying on it. Since 2017, the first annual payment was US$1.28, compared to the most recent full-year payment of US$1.52. This works out to be a compound annual growth rate (CAGR) of approximately 4.4% a year over that time. Modest dividend growth is good to see, especially with the payments being relatively stable. However, the payment history is relatively short and we wouldn't want to rely on this dividend too much.

The Dividend Looks Likely To Grow

Some investors will be chomping at the bit to buy some of the company's stock based on its dividend history. Janus Henderson Group has impressed us by growing EPS at 14% per year over the past five years. Shareholders are getting plenty of the earnings returned to them, which combined with strong growth makes this quite appealing.

Janus Henderson Group Looks Like A Great Dividend Stock

Overall, a dividend increase is always good, and we think that Janus Henderson Group is a strong income stock thanks to its track record and growing earnings. Distributions are quite easily covered by earnings, which are also being converted to cash flows. Taking this all into consideration, this looks like it could be a good dividend opportunity.

Investors generally tend to favour companies with a consistent, stable dividend policy as opposed to those operating an irregular one. However, there are other things to consider for investors when analysing stock performance. Just as an example, we've come across 2 warning signs for Janus Henderson Group you should be aware of, and 1 of them is potentially serious. We have also put together a list of global stocks with a solid dividend.

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This article by Simply Wall St is general in nature. 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.
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