RIT Capital Partners plc (LON: RCP) has passed our checks and is about to pay a dividend of £ 0.18 in the UK
RIT Capital Partners plc (LON: RCP) is set to trade ex-dividend within the next 3 days. The ex-dividend date is generally set at one working day before the registration date which is the deadline by which you must be present in the books of the company as a shareholder to receive the dividend. The ex-dividend date is important because every time a stock is bought or sold, the transaction takes at least two business days to settle. As a result, investors in RIT Capital Partners who buy the shares on or after September 30 will not receive the dividend, which will be paid on October 29.
The company’s next dividend payment will be Â£ 0.18 per share. Last year, in total, the company distributed Â£ 0.35 to shareholders. Last year’s total dividend payouts show RIT Capital Partners has a return of 1.4% on the current share price of Â£ 25.8. If you are buying this company for its dividend, you should know if the dividend from RIT Capital Partners is reliable and sustainable. Accordingly, readers should always check whether RIT Capital Partners has been able to increase its dividends or if the dividend could be reduced.
Check out our latest review for RIT Capital Partners
Dividends are usually paid out of the company’s profits, so if a company pays more than it earned, its dividend is usually at risk of being reduced. RIT Capital Partners only paid 4.3% of its profits last year, which in our opinion is moderately low and leaves a lot of room for unforeseen circumstances.
When a company has paid less dividends than it made a profit, it usually suggests that its dividend is affordable. The lower the% of its profit that it pays out, the greater the margin of safety for the dividend if the company goes into recession.
Click here to see how much of its profits RIT Capital Partners has paid in the past 12 months.
Have profits and dividends increased?
Stocks of companies that generate sustainable earnings growth often offer the best dividend prospects because it’s easier to raise the dividend when earnings rise. If profits fall enough, the company could be forced to cut its dividend. That’s why it’s heartwarming to see RIT Capital Partners’ profits soar, rising 46% annually over the past five years.
Many investors will assess a company’s dividend yield by evaluating how much dividend payments have changed over time. Over the past 10 years, RIT Capital Partners has increased its dividend by around 24% per year on average. It’s great to see earnings per share increasing rapidly over several years, and dividends per share increasing at the same time.
The bottom line
Is RIT Capital Partners an attractive dividend-paying stock, or better left on the shelf? When companies grow rapidly and keep the majority of profits within the company, it is usually a sign that reinvesting profits is creating more value than paying dividends to shareholders. This is one of the most attractive investment combinations for this analysis as it can create substantial value for long-term investors. In summary, RIT Capital Partners seems to have some promise as a dividend stock, and we suggest you take a closer look.
On that note, you’ll want to research the risks that RIT Capital Partners faces. To this end, you should inquire about the 2 warning signs we spotted with RIT Capital Partners (including 1 which is worrying).
A common investment mistake is to buy the first interesting stock you see. Here you will find a list of promising dividend paying stocks with a yield above 2% and an upcoming dividend.
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This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts using only unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell shares and does not take into account your goals or your financial situation. Our aim is to bring you long-term, targeted analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price sensitive companies or qualitative documents. Simply Wall St has no position in the mentioned stocks.
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