UK markets closed
  • FTSE 100

    7,030.78
    +14.29 (+0.20%)
     
  • FTSE 250

    23,632.84
    +200.03 (+0.85%)
     
  • AIM

    1,271.15
    -2.41 (-0.19%)
     
  • GBP/EUR

    1.1718
    +0.0008 (+0.06%)
     
  • GBP/USD

    1.3783
    -0.0053 (-0.38%)
     
  • BTC-GBP

    34,843.96
    -281.51 (-0.80%)
     
  • CMC Crypto 200

    1,234.97
    +1.68 (+0.14%)
     
  • S&P 500

    4,452.81
    -27.89 (-0.62%)
     
  • DOW

    34,616.03
    -198.36 (-0.57%)
     
  • CRUDE OIL

    72.13
    -0.48 (-0.66%)
     
  • GOLD FUTURES

    1,753.90
    -40.90 (-2.28%)
     
  • NIKKEI 225

    30,323.34
    -188.37 (-0.62%)
     
  • HANG SENG

    24,667.85
    -365.36 (-1.46%)
     
  • DAX

    15,651.75
    +35.75 (+0.23%)
     
  • CAC 40

    6,622.59
    +38.97 (+0.59%)
     

Synchrony Financial's (NYSE:SYF) Dividend Will Be US$0.22

  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
·2-min read
In this article:
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.

Synchrony Financial (NYSE:SYF) will pay a dividend of US$0.22 on the 12th of August. Based on this payment, the dividend yield will be 1.9%, which is fairly typical for the industry.

See our latest analysis for Synchrony Financial

Synchrony Financial's Earnings Easily Cover the Distributions

We like to see a healthy dividend yield, but that is only helpful to us if the payment can continue. However, prior to this announcement, Synchrony Financial's dividend was comfortably covered by both cash flow and earnings. As a result, a large proportion of what it earned was being reinvested back into the business.

The next year is set to see EPS grow by 4.6%. Assuming the dividend continues along recent trends, we think the payout ratio could be 18% by next year, which is in a pretty sustainable range.

historic-dividend
historic-dividend

Synchrony Financial Doesn't Have A Long Payment History

The dividend's track record has been pretty solid, but with only 5 years of history we want to see a few more years of history before making any solid conclusions. The dividend has gone from US$0.52 in 2016 to the most recent annual payment of US$0.88. This means that it has been growing its distributions at 11% per annum over that time. The dividend has been growing rapidly, however with such a short payment history we can't know for sure if payment can continue to grow over the long term, so caution may be warranted.

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. Synchrony Financial has impressed us by growing EPS at 16% per year over the past five years. Growth in EPS bodes well for the dividend, as does the low payout ratio that the company is currently reporting.

Synchrony Financial Looks Like A Great Dividend Stock

Overall, we think that this is a great income investment, and we think that maintaining the dividend this year may have been a conservative choice. 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. Meanwhile, despite the importance of dividend payments, they are not the only factors our readers should know when assessing a company. Just as an example, we've come across 2 warning signs for Synchrony Financial you should be aware of, and 1 of them is a bit unpleasant. Looking for more high-yielding dividend ideas? Try our curated list of strong dividend payers.

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.

Our goal is to create a safe and engaging place for users to connect over interests and passions. In order to improve our community experience, we are temporarily suspending article commenting