Virtus Investment Partners' (NYSE:VRTS) Upcoming Dividend Will Be Larger Than Last Year's

The board of Virtus Investment Partners, Inc. (NYSE:VRTS) has announced that it will be paying its dividend of $2.25 on the 13th of November, an increased payment from last year's comparable dividend. This makes the dividend yield 3.6%, which is above the industry average.

Check out our latest analysis for Virtus Investment Partners

Virtus Investment Partners' Earnings Easily Cover The Distributions

A big dividend yield for a few years doesn't mean much if it can't be sustained. Prior to this announcement, Virtus Investment Partners' dividend was comfortably covered by both cash flow and earnings. This indicates that a lot of the earnings are being reinvested into the business, with the aim of fueling growth.

If the trend of the last few years continues, EPS will grow by 9.4% over the next 12 months. If the dividend continues on this path, the payout ratio could be 56% by next year, which we think can be pretty sustainable going forward.

Virtus Investment Partners 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. Since 2014, the dividend has gone from $1.80 total annually to $7.60. This works out to be a compound annual growth rate (CAGR) of approximately 15% a year over that time. It is good to see that there has been strong dividend growth, and that there haven't been any cuts for a long time.

The Dividend Has Growth Potential

The company's investors will be pleased to have been receiving dividend income for some time. Virtus Investment Partners has impressed us by growing EPS at 9.4% per year over the past five years. The company is paying a reasonable amount of earnings to shareholders, and is growing earnings at a decent rate so we think it could be a decent dividend stock.

We Really Like Virtus Investment Partners' Dividend

Overall, a dividend increase is always good, and we think that Virtus Investment Partners is a strong income stock thanks to its track record and growing earnings. 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.

Companies possessing a stable dividend policy will likely enjoy greater investor interest than those suffering from a more inconsistent approach. At the same time, there are other factors our readers should be conscious of before pouring capital into a stock. For example, we've picked out 1 warning sign for Virtus Investment Partners that investors should know about before committing capital to this stock. If you are a dividend investor, you might also want to look at our curated list of high yield dividend stocks.

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