Virtus Investment Partners, Inc. (NASDAQ: VRTS) the dividend will increase to US $ 1.50 on November 12. Despite this increase, the 1.3% dividend yield is only a modest boost to shareholder returns.
Check out our latest review for Virtus Investment Partners
Virtus Investment Partners’ dividend is well covered by earnings
If predictable over a long period of time, even low dividend yields can be attractive. Before making this announcement, Virtus Investment Partners was easily earning enough to cover the dividend. This means that most of its profits are kept to grow the business.
Over the next year, EPS could increase by 48.4% if recent trends continue. If the dividend continues according to recent trends, we estimate that the payout ratio will be 13%, which is within the range that puts us at ease with the sustainability of the dividend.
Virtus Investment Partners does not have a long payment history
Virtus Investment Partners’ dividend has been fairly stable for a little while now, but we will remain cautious until this is demonstrated in a few years. Since 2014, the dividend has increased from US $ 1.80 to US $ 6.00. This implies that the company has increased its distributions at an annual rate of approximately 19% over this period. We’re not too excited about the relatively short history of dividend payments, but the dividend is growing at a good pace and we could take a closer look.
The dividend seems likely to increase
Investors in the company will be happy to receive dividends for some time. Virtus Investment Partners has seen its EPS increase over the past five years, to 48% per year. A low payout ratio gives the company a lot of flexibility, and the growth in earnings also allows it to increase the dividend very easily.
We really like the dividend from Virtus Investment Partners
All in all, a dividend increase is always good, and we believe Virtus Investment Partners is a high-income stock thanks to its track record and growing earnings. Distributions are quite easily covered by profits, which are also converted into cash flow. All of these factors taken into account, we believe this has strong potential as a dividend-paying stock.
Market movements testify to the high value of a coherent dividend policy compared to a more unpredictable one. At the same time, there are other factors that our readers should be aware of before investing any capital in a stock. For example, we have selected 2 warning signs for Virtus Investment Partners that investors should be aware of before committing capital to this stock. If you are a dividend investor, you can also view our organized list of high performing dividend stocks.
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