2 Days Left Before Virtu Financial, Inc. (NASDAQ:VIRT) Will Be Trading Ex-Dividend
Want to participate in a short research study? Help shape the future of investing tools and receive a $20 prize!
Important news for shareholders and potential investors in Virtu Financial, Inc. (NASDAQ:VIRT): The dividend payment of US$0.24 per share will be distributed to shareholders on 15 March 2019, and the stock will begin trading ex-dividend at an earlier date, 28 February 2019. Is this future income stream a compelling catalyst for dividend investors to think about the stock as an investment today? Let’s take a look at Virtu Financial’s most recent financial data to examine its dividend characteristics in more detail.
Check out our latest analysis for Virtu Financial
How I analyze a dividend stock
If you are a dividend investor, you should always assess these five key metrics:
Is their annual yield among the top 25% of dividend payers?
Has it paid dividend every year without dramatically reducing payout in the past?
Has dividend per share amount increased over the past?
Does earnings amply cover its dividend payments?
Will it be able to continue to payout at the current rate in the future?
How well does Virtu Financial fit our criteria?
The company currently pays out 33% of its earnings as a dividend, according to its trailing twelve-month data, which means that the dividend is covered by earnings. Going forward, analysts expect VIRT’s payout to increase to 43% of its earnings. Assuming a constant share price, this equates to a dividend yield of around 3.9%. However, EPS is forecasted to fall to $1.74 in the upcoming year. Therefore, although payout is expected to increase, the fall in earnings may not equate to higher dividend income.
When considering the sustainability of dividends, it is also worth checking the cash flow of a company. A company with strong cash flow, relative to earnings, can sometimes sustain a high pay out ratio.
If there is one thing that you want to be reliable in your life, it’s dividend stocks and their constant income stream. Unfortunately, it is really too early to view Virtu Financial as a dividend investment. It has only been consistently paying dividends for 4 years, however, standard practice for reliable payers is to look for a 10-year minimum track record.
In terms of its peers, Virtu Financial produces a yield of 3.7%, which is high for Capital Markets stocks.
Next Steps:
Considering the dividend attributes we analyzed above, Virtu Financial is definitely worth keeping an eye on for someone looking to build a dedicated income portfolio. Given that this is purely a dividend analysis, I recommend taking sufficient time to understand its core business and determine whether the company and its investment properties suit your overall goals. There are three essential factors you should further research:
Future Outlook: What are well-informed industry analysts predicting for VIRT’s future growth? Take a look at our free research report of analyst consensus for VIRT’s outlook.
Valuation: What is VIRT worth today? Even if the stock is a cash cow, it’s not worth an infinite price. The intrinsic value infographic in our free research report helps visualize whether VIRT is currently mispriced by the market.
Other Dividend Rockstars: Are there better dividend payers with stronger fundamentals out there? Check out our free list of these great stocks here.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.
