Hackett Group's (NASDAQ:HCKT) Dividend Will Be $0.11

The board of The Hackett Group, Inc. (NASDAQ:HCKT) has announced that it will pay a dividend of $0.11 per share on the 3rd of January. Including this payment, the dividend yield on the stock will be 1.4%, which is a modest boost for shareholders' returns.

View our latest analysis for Hackett Group

Hackett Group's Future Dividend Projections Appear Well Covered By Earnings

It would be nice for the yield to be higher, but we should also check if higher levels of dividend payment would be sustainable. Before making this announcement, Hackett Group was easily earning enough to cover the dividend. This means that most of its earnings are being retained to grow the business.

The next year is set to see EPS grow by 12.5%. If the dividend continues on this path, the payout ratio could be 35% by next year, which we think can be pretty sustainable going forward.

Hackett Group Has A Solid Track Record

The company has an extended history of paying stable dividends. Since 2014, the dividend has gone from $0.10 total annually to $0.44. This works out to be a compound annual growth rate (CAGR) of approximately 16% 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.

Hackett Group Could Grow Its Dividend

The company's investors will be pleased to have been receiving dividend income for some time. Hackett Group has seen EPS rising for the last five years, at 9.0% per annum. With a decent amount of growth and a low payout ratio, we think this bodes well for Hackett Group's prospects of growing its dividend payments in the future.

We Really Like Hackett Group's Dividend

In summary, it is good to see that the dividend is staying consistent, and we don't think there is any reason to suspect this might change over the medium term. 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. 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. However, there are other things to consider for investors when analysing stock performance. See if management have their own wealth at stake, by checking insider shareholdings in Hackett Group 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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