Yahoo Finance Rogers Communications (TSE:RCI.B) Is Due To Pay A Dividend Of CA$0.50
Rogers Communications Inc.'s (TSE:RCI.B) investors are due to receive a payment of CA$0.50 per share on 5th of July. Including this payment, the dividend yield on the stock will be 3.0%, which is a modest boost for shareholders' returns.
Check out our latest analysis for Rogers Communications
Rogers Communications' Dividend Is Well Covered By Earnings
The dividend yield is a little bit low, but sustainability of the payments is also an important part of evaluating an income stock. Prior to this announcement, Rogers Communications' dividend was only 56% of earnings, however it was paying out 134% of free cash flows. The company might be more focused on returning cash to shareholders, but paying out this much of its cash flow could expose the dividend to being cut in the future.
Looking forward, earnings per share is forecast to rise by 108.3% over the next year. Assuming the dividend continues along recent trends, we think the payout ratio could be 27% by next year, which is in a pretty sustainable range.
Rogers Communications Has A Solid Track Record
The company has an extended history of paying stable dividends. The dividend has gone from an annual total of CA$1.58 in 2013 to the most recent total annual payment of CA$2.00. This means that it has been growing its distributions at 2.4% per annum over that time. Dividends have grown relatively slowly, which is not great, but some investors may value the relative consistency of the dividend.
Rogers Communications May Find It Hard To Grow The Dividend
Investors who have held shares in the company for the past few years will be happy with the dividend income they have received. Let's not jump to conclusions as things might not be as good as they appear on the surface. Rogers Communications hasn't seen much change in its earnings per share over the last five years.
Our Thoughts On Rogers Communications' 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. With cash flows lacking, it is difficult to see how the company can sustain a dividend payment. This company is not in the top tier of income providing stocks.
Companies possessing a stable dividend policy will likely enjoy greater investor interest than those suffering from a more inconsistent approach. At the same time, there are other factors our readers should be conscious of before pouring capital into a stock. For example, we've identified 2 warning signs for Rogers Communications (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.
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