A deep dive into the dividend history, yield, growth rates, and future prospects of Rathbones Group PLC
Rathbones Group PLC (RTBBF, Financial) recently announced a dividend of $0.34 per share, payable on 2023-10-11, with the ex-dividend date set for 2023-09-19. As investors look forward to this upcoming payment, the spotlight also shines on the company's dividend history, yield, and growth rates. Using the data from GuruFocus, let's deep dive into Rathbones Group PLC's dividend performance and assess its sustainability.
About Rathbones Group PLC
Rathbones Group PLC provides investment and wealth management services to private clients, charities, professional intermediaries, and trustees. The group also provides other banking, financial advisory, tax, legal, and trust services. Alongside investment management services, Rathbone provides unit trust and multi-asset fund products sold through intermediaries to the retail sector. Nearly all the funds under management fall under the investment management category, with private clients contributing the majority of a portion of assets. The company relies on a group of committees to oversee manager performance and ensure the investment process is appropriately resourced. To meet client needs, investment offerings cover a multitude of asset classes and risk levels.
Understanding Rathbones Group PLC's Dividend History
Rathbones Group PLC has maintained a consistent dividend payment record since 2014. Dividends are currently distributed on a quarterly basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Rathbones Group PLC's Dividend Yield and Growth
As of today, Rathbones Group PLC currently has a 12-month trailing dividend yield of 4.66% and a 12-month forward dividend yield of 6.52%. This suggests an expectation of increase dividend payments over the next 12 months.
Over the past three years, Rathbones Group PLC's annual dividend growth rate was 7.00%. Extended to a five-year horizon, this rate decreased to 6.70% per year. And over the past decade, Rathbones Group PLC's annual dividends per share growth rate stands at 5.80%.
Based on Rathbones Group PLC's dividend yield and five-year growth rate, the 5-year yield on cost of Rathbones Group PLC stock as of today is approximately 6.44%.
Assessing Dividend Sustainability: Payout Ratio and Profitability
To assess the sustainability of the dividend, one needs to evaluate the company's payout ratio. The dividend payout ratio provides insights into the portion of earnings the company distributes as dividends. A lower ratio suggests that the company retains a significant part of its earnings, thereby ensuring the availability of funds for future growth and unexpected downturns. As of 2023-06-30, Rathbones Group PLC's dividend payout ratio is 1.15. This may suggest that the company's dividend may not be sustainable.
Rathbones Group PLC's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Rathbones Group PLC's profitability 6 out of 10 as of 2023-06-30, suggesting fair profitability. The company has reported positive net income for each of year over the past decade, further solidifying its high profitability.
Future Prospects: Growth Metrics
To ensure the sustainability of dividends, a company must have robust growth metrics. Rathbones Group PLC's growth rank of 6 out of 10 suggests that the company has a fair growth outlook.
Revenue is the lifeblood of any company, and Rathbones Group PLC's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Rathbones Group PLC's revenue has increased by approximately 6.40% per year on average, a rate that outperforms than approximately 52.23% of global competitors.
The company's 3-year EPS growth rate showcases its capability to grow its earnings, a critical component for sustaining dividends in the long run. During the past three years, Rathbones Group PLC's earnings increased by approximately 18.80% per year on average, a rate that outperforms than approximately 63.01% of global competitors.
Lastly, the company's 5-year EBITDA growth rate of 1.70%, which outperforms than approximately 35.37% of global competitors.
Conclusion
While Rathbones Group PLC has a consistent dividend payment history and a promising yield, its high payout ratio raises questions about the sustainability of its dividends. However, the company's solid profitability and fair growth metrics provide some reassurance. Investors should keep a close eye on these factors while making investment decisions.
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