Yahoo Finance Lorne Park Capital Partners (CVE:LPC) Is Paying Out A Dividend Of CA$0.007
Lorne Park Capital Partners Inc. (CVE:LPC) has announced that it will pay a dividend of CA$0.007 per share on the 30th of April. This makes the dividend yield 2.4%, which will augment investor returns quite nicely.
See our latest analysis for Lorne Park Capital Partners
Lorne Park Capital Partners' Earnings Easily Cover The Distributions
A big dividend yield for a few years doesn't mean much if it can't be sustained. Prior to this announcement, Lorne Park Capital Partners' dividend made up quite a large proportion of earnings but only 38% of free cash flows. This leaves plenty of cash for reinvestment into the business.
Looking forward, earnings per share could rise by 29.2% over the next year if the trend from the last few years continues. Under the assumption that the dividend will continue along recent trends, we think the payout ratio could be 64% which would be quite comfortable going to take the dividend forward.
Lorne Park Capital Partners Doesn't Have A Long Payment History
The company has maintained a consistent dividend for a few years now, but we would like to see a longer track record before relying on it. Since 2021, the annual payment back then was CA$0.02, compared to the most recent full-year payment of CA$0.028. This implies that the company grew its distributions at a yearly rate of about 12% over that duration. Lorne Park Capital Partners has been growing its dividend quite rapidly, which is exciting. However, the short payment history makes us question whether this performance will persist across a full market cycle.
Lorne Park Capital Partners 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. It's encouraging to see that Lorne Park Capital Partners has been growing its earnings per share at 29% a year over the past five years. EPS is growing rapidly, although the company is also paying out a large portion of its profits as dividends. If earnings keep growing, the dividend may be sustainable, but generally we'd prefer to see a fast growing company reinvest in further growth.
Our Thoughts On Lorne Park Capital Partners' Dividend
Overall, it's nice to see a consistent dividend payment, but we think that longer term, the current level of payment might be unsustainable. The payments haven't been particularly stable and we don't see huge growth potential, but with the dividend well covered by cash flows it could prove to be reliable over the short term. 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. However, there are other things to consider for investors when analysing stock performance. For example, we've identified 3 warning signs for Lorne Park Capital Partners (1 is a bit concerning!) that you should be aware of before investing. 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.
