U.S. markets open in 1 hour 27 minutes
  • S&P Futures

    4,378.75
    +30.50 (+0.70%)
     
  • Dow Futures

    34,098.00
    +259.00 (+0.77%)
     
  • Nasdaq Futures

    15,111.50
    +102.00 (+0.68%)
     
  • Russell 2000 Futures

    2,195.90
    +19.10 (+0.88%)
     
  • Crude Oil

    71.15
    +0.86 (+1.22%)
     
  • Gold

    1,768.40
    +4.60 (+0.26%)
     
  • Silver

    22.56
    +0.36 (+1.60%)
     
  • EUR/USD

    1.1748
    +0.0021 (+0.18%)
     
  • 10-Yr Bond

    1.3090
    0.0000 (0.00%)
     
  • Vix

    23.17
    +2.36 (+11.34%)
     
  • GBP/USD

    1.3683
    +0.0023 (+0.17%)
     
  • USD/JPY

    109.4160
    -0.0040 (-0.00%)
     
  • BTC-USD

    43,304.28
    -451.69 (-1.03%)
     
  • CMC Crypto 200

    1,086.09
    -48.29 (-4.26%)
     
  • FTSE 100

    6,985.18
    +81.27 (+1.18%)
     
  • Nikkei 225

    29,839.71
    -660.34 (-2.17%)
     

RELX (LON:REL) Is Paying Out A Larger Dividend Than Last Year

  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
·2 min read
In this article:
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.

RELX PLC (LON:REL) has announced that it will be increasing its dividend on the 8th of September to UK£0.14. This will take the annual payment from 2.3% to 2.3% of the stock price, which is above what most companies in the industry pay.

Check out our latest analysis for RELX

RELX's Dividend Is Well Covered By Earnings

We like to see robust dividend yields, but that doesn't matter if the payment isn't sustainable. Based on the last payment, RELX was quite comfortably earning enough to cover the dividend. This means that a large portion of its earnings are being retained to grow the business.

Over the next year, EPS is forecast to expand by 10.1%. Assuming the dividend continues along recent trends, we think the payout ratio could be 68% by next year, which is in a pretty sustainable range.

historic-dividend
historic-dividend

RELX Has A Solid Track Record

Even over a long history of paying dividends, the company's distributions have been remarkably stable. The dividend has gone from UK£0.20 in 2011 to the most recent annual payment of UK£0.48. This works out to be a compound annual growth rate (CAGR) of approximately 8.9% a year over that time. Companies like this can be very valuable over the long term, if the decent rate of growth can be maintained.

RELX Could 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 RELX has been growing its earnings per share at 5.7% a year over the past five years. Since earnings per share is growing at an acceptable rate, and the payout policy is balanced, we think the company is positioning itself well to grow earnings and dividends in the future.

RELX Looks Like A Great Dividend Stock

Overall, we think this could be an attractive income stock, and it is only getting better by paying a higher dividend this year. Distributions are quite easily covered by earnings, which are also being converted to cash flows. All of these factors considered, we think this has solid potential as a dividend stock.

Investors generally tend to favour companies with a consistent, stable dividend policy as opposed to those operating an irregular one. Still, investors need to consider a host of other factors, apart from dividend payments, when analysing a company. As an example, we've identified 1 warning sign for RELX that you should be aware of before investing. We have also put together a list of global stocks with a solid dividend.

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. 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.