Yahoo Finance There's A Lot To Like About Virtus Investment Partners' (NYSE:VRTS) Upcoming US$1.90 Dividend
Readers hoping to buy Virtus Investment Partners, Inc. (NYSE:VRTS) for its dividend will need to make their move shortly, as the stock is about to trade ex-dividend. Typically, the ex-dividend date is one business day before the record date which is the date on which a company determines the shareholders eligible to receive a dividend. The ex-dividend date is important because any transaction on a stock needs to have been settled before the record date in order to be eligible for a dividend. This means that investors who purchase Virtus Investment Partners' shares on or after the 29th of April will not receive the dividend, which will be paid on the 15th of May.
The company's upcoming dividend is US$1.90 a share, following on from the last 12 months, when the company distributed a total of US$7.60 per share to shareholders. Based on the last year's worth of payments, Virtus Investment Partners stock has a trailing yield of around 3.3% on the current share price of US$233.14. If you buy this business for its dividend, you should have an idea of whether Virtus Investment Partners's dividend is reliable and sustainable. So we need to check whether the dividend payments are covered, and if earnings are growing.
Check out our latest analysis for Virtus Investment Partners
Dividends are typically paid from company earnings. If a company pays more in dividends than it earned in profit, then the dividend could be unsustainable. Virtus Investment Partners paid out a comfortable 39% of its profit last year.
Generally speaking, the lower a company's payout ratios, the more resilient its dividend usually is.
Click here to see the company's payout ratio, plus analyst estimates of its future dividends.
Have Earnings And Dividends Been Growing?
Companies with consistently growing earnings per share generally make the best dividend stocks, as they usually find it easier to grow dividends per share. If earnings fall far enough, the company could be forced to cut its dividend. For this reason, we're glad to see Virtus Investment Partners's earnings per share have risen 14% per annum over the last five years.
Many investors will assess a company's dividend performance by evaluating how much the dividend payments have changed over time. Virtus Investment Partners has delivered 15% dividend growth per year on average over the past 10 years. It's exciting to see that both earnings and dividends per share have grown rapidly over the past few years.
Final Takeaway
Has Virtus Investment Partners got what it takes to maintain its dividend payments? Companies like Virtus Investment Partners that are growing rapidly and paying out a low fraction of earnings, are usually reinvesting heavily in their business. This strategy can add significant value to shareholders over the long term - as long as it's done without issuing too many new shares. Overall, Virtus Investment Partners looks like a promising dividend stock in this analysis, and we think it would be worth investigating further.
So while Virtus Investment Partners looks good from a dividend perspective, it's always worthwhile being up to date with the risks involved in this stock. For example, we've found 1 warning sign for Virtus Investment Partners that we recommend you consider before investing in the business.
A common investing mistake is buying the first interesting stock you see. Here you can find a full 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.
