PJT Partners (NYSE:PJT) Is Due To Pay A Dividend Of $0.25

PJT Partners Inc.'s (NYSE:PJT) investors are due to receive a payment of $0.25 per share on 20th of March. This means the annual payment will be 1.0% of the current stock price, which is lower than the industry average.

Check out our latest analysis for PJT Partners

PJT Partners' Earnings Easily Cover The Distributions

If it is predictable over a long period, even low dividend yields can be attractive. However, prior to this announcement, PJT Partners' dividend was comfortably covered by both cash flow and earnings. This means that most of its earnings are being retained to grow the business.

EPS is set to fall by 6.7% over the next 12 months. Assuming the dividend continues along recent trends, we believe the payout ratio could be 41%, which we are pretty comfortable with and we think is feasible on an earnings basis.

PJT Partners Is Still Building Its Track Record

It is great to see that PJT Partners has been paying a stable dividend for a number of years now, however we want to be a bit cautious about whether this will remain true through a full economic cycle. The annual payment during the last 8 years was $0.20 in 2016, and the most recent fiscal year payment was $1.00. This means that it has been growing its distributions at 22% per annum over that time. We're not overly excited about the relatively short history of dividend payments, however the dividend is growing at a nice rate and we might take a closer look.

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. PJT Partners has impressed us by growing EPS at 22% per year over the past five years. Rapid earnings growth and a low payout ratio suggest this company has been effectively reinvesting in its business. Should that continue, this company could have a bright future.

We Really Like PJT Partners' Dividend

Overall, we like to see the dividend staying consistent, and we think PJT Partners might even raise payments in the future. The distributions are easily covered by earnings, and there is plenty of cash being generated as well. We should point out that the earnings are expected to fall over the next 12 months, which won't be a problem if this doesn't become a trend, but could cause some turbulence in the next year. Taking this all into consideration, this looks like it could be a good dividend opportunity.

Companies possessing a stable dividend policy will likely enjoy greater investor interest than those suffering from a more inconsistent approach. Still, investors need to consider a host of other factors, apart from dividend payments, when analysing a company. For example, we've picked out 1 warning sign for PJT Partners that investors should know about before committing capital to this stock. Is PJT Partners not quite the opportunity you were looking for? Why not check out our selection of top dividend stocks.

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