RELX's (LON:REL) Shareholders Will Receive A Bigger Dividend Than Last Year
The board of RELX PLC (LON:REL) has announced that it will be paying its dividend of £0.418 on the 13th of June, an increased payment from last year's comparable dividend. This makes the dividend yield about the same as the industry average at 1.7%.
View our latest analysis for RELX
RELX's Dividend Is Well Covered By Earnings
Solid dividend yields are great, but they only really help us if the payment is sustainable. Based on the last payment, RELX was quite comfortably earning enough to cover the dividend. This indicates that a lot of the earnings are being reinvested into the business, with the aim of fueling growth.
The next year is set to see EPS grow by 39.1%. If the dividend continues along recent trends, we estimate the payout ratio will be 48%, which is in the range that makes us comfortable with the sustainability of the dividend.
RELX Has A Solid Track Record
The company has a sustained record of paying dividends with very little fluctuation. The annual payment during the last 10 years was £0.23 in 2014, and the most recent fiscal year payment was £0.588. This works out to be a compound annual growth rate (CAGR) of approximately 9.8% a year over that time. The dividend has been growing very nicely for a number of years, and has given its shareholders some nice income in their portfolios.
We Could See RELX's Dividend Growing
The company's investors will be pleased to have been receiving dividend income for some time. RELX has seen EPS rising for the last five years, at 5.7% per annum. Earnings are on the uptrend, and it is only paying a small portion of those earnings to shareholders.
We Really Like RELX's Dividend
Overall, a dividend increase is always good, and we think that RELX is a strong income stock thanks to its track record and growing earnings. The company is easily earning enough to cover its dividend payments and it is great to see that these earnings are being translated into cash flow. All in all, this checks a lot of the boxes we look for when choosing an income stock.
Investors generally tend to favour companies with a consistent, stable dividend policy as opposed to those operating an irregular one. At the same time, there are other factors our readers should be conscious of before pouring capital into a stock. For instance, we've picked out 1 warning sign for RELX that investors should take into consideration. Looking for more high-yielding dividend ideas? Try our collection of strong dividend payers.
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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.
