Yahoo Finance Judges Scientific (LON:JDG) Has Announced That It Will Be Increasing Its Dividend To UK£0.39
Judges Scientific plc's (LON:JDG) dividend will be increasing to UK£0.39 on 9th of July. Although the dividend is now higher, the yield is only 0.9%, which is below the industry average.
See our latest analysis for Judges Scientific
Judges Scientific's Earnings Easily Cover the Distributions
Even a low dividend yield can be attractive if it is sustained for years on end. The last dividend was quite easily covered by Judges Scientific's earnings. This indicates that quite a large proportion of earnings is being invested back into the business.
Looking forward, earnings per share could rise by 59.3% over the next year if the trend from the last few years continues. If the dividend continues along recent trends, we estimate the payout ratio will be 31%, which is in the range that makes us comfortable with the sustainability of the dividend.
Judges Scientific 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 2011, the dividend has gone from UK£0.075 to UK£0.55. This works out to be a compound annual growth rate (CAGR) of approximately 22% a year over that time. 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 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. We are encouraged to see that Judges Scientific has grown earnings per share at 59% per year over the past five years. Judges Scientific is clearly able to grow rapidly while still returning cash to shareholders, positioning it to become a strong dividend payer in the future.
Judges Scientific Looks Like A Great Dividend Stock
Overall, a dividend increase is always good, and we think that Judges Scientific 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.
Investors generally tend to favour companies with a consistent, stable dividend policy as opposed to those operating an irregular one. Still, investors need to consider a host of other factors, apart from dividend payments, when analysing a company. For instance, we've picked out 1 warning sign for Judges Scientific that investors should take into consideration. If you are a dividend investor, you might also want to look at our curated list of high performing dividend stock.
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.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
