Yahoo Finance Brewin Dolphin Holdings (LON:BRW) Is Paying Out A Larger Dividend Than Last Year
The board of Brewin Dolphin Holdings PLC (LON:BRW) has announced that it will be increasing its dividend on the 9th of February to UK£0.11. This will take the annual payment from 4.2% to 4.2% of the stock price, which is above what most companies in the industry pay.
Check out our latest analysis for Brewin Dolphin Holdings
Brewin Dolphin Holdings' Earnings Easily Cover the Distributions
If the payments aren't sustainable, a high yield for a few years won't matter that much. The last payment made up 83% of earnings, but cash flows were much higher. This leaves plenty of cash for reinvestment into the business.
EPS is set to grow by 10.9% over the next year. If recent patterns in the dividend continues, the payout ratio in 12 months could be 79% which is a bit high but can definitely be sustainable.
Brewin Dolphin Holdings 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. The first annual payment during the last 10 years was UK£0.071 in 2012, and the most recent fiscal year payment was UK£0.16. This means that it has been growing its distributions at 8.3% per annum over that time. The dividend has been growing very nicely for a number of years, and has given its shareholders some nice income in their portfolios.
We Could See Brewin Dolphin Holdings' Dividend Growing
Investors who have held shares in the company for the past few years will be happy with the dividend income they have received. Brewin Dolphin Holdings has impressed us by growing EPS at 5.4% per year over the past five years. The payout ratio is very much on the higher end, which could mean that the growth rate will slow down in the future, and that could flow through to the dividend as well.
In Summary
In summary, while it's always good to see the dividend being raised, we don't think Brewin Dolphin Holdings' payments are rock solid. The company is generating plenty of cash, but we still think the dividend is a bit high for comfort. Overall, we don't think this company has the makings of a good income stock.
Market movements attest to how highly valued a consistent dividend policy is compared to one which is more unpredictable. At the same time, there are other factors our readers should be conscious of before pouring capital into a stock. Companies that are growing earnings tend to be the best dividend stocks over the long term. See what the 8 analysts we track are forecasting for Brewin Dolphin Holdings for free with public analyst estimates for the company. Looking for more high-yielding dividend ideas? Try our curated list of strong dividend payers.
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