Yahoo Finance Polar Capital Holdings (LON:POLR) Has Affirmed Its Dividend Of £0.14
Polar Capital Holdings plc (LON:POLR) has announced that it will pay a dividend of £0.14 per share on the 13th of January. This makes the dividend yield 9.4%, which will augment investor returns quite nicely.
Check out our latest analysis for Polar Capital Holdings
Polar Capital Holdings Doesn't Earn Enough To Cover Its Payments
Impressive dividend yields are good, but this doesn't matter much if the payments can't be sustained. Based on the last payment, Polar Capital Holdings' profits didn't cover the dividend, but the company was generating enough cash instead. Given that the dividend is a cash outflow, we think that cash is more important than accounting measures of profit when assessing the dividend, so this is a mitigating factor.
Over the next year, EPS is forecast to fall by 35.7%. Assuming the dividend continues along recent trends, we believe the payout ratio could reach 188%, which could put the dividend under pressure if earnings don't start to improve.
Polar Capital Holdings Has A Solid Track Record
Even over a long history of paying dividends, the company's distributions have been remarkably stable. Since 2012, the dividend has gone from £0.09 total annually to £0.46. This implies that the company grew its distributions at a yearly rate of about 18% over that duration. Rapidly growing dividends for a long time is a very valuable feature for an income stock.
Polar Capital Holdings Might Find It Hard To Grow Its Dividend
Investors who have held shares in the company for the past few years will be happy with the dividend income they have received. Polar Capital Holdings has impressed us by growing EPS at 15% per year over the past five years. However, the payout ratio is very high, not leaving much room for growth of the dividend in the future.
Our Thoughts On Polar Capital Holdings' Dividend
Overall, we don't think this company makes a great dividend stock, even though the dividend wasn't cut this year. The company has been bring in plenty of cash to cover the dividend, but we don't necessarily think that makes it a great dividend stock. This company is not in the top tier of income providing stocks.
Investors generally tend to favour companies with a consistent, stable dividend policy as opposed to those operating an irregular one. At the same time, there are other factors our readers should be conscious of before pouring capital into a stock. Just as an example, we've come across 3 warning signs for Polar Capital Holdings you should be aware of, and 1 of them doesn't sit too well with us. 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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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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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