Tatton Asset Management plc (LON:TAM) Looks Interesting, And It's About To Pay A Dividend
Tatton Asset Management plc (LON:TAM) is about to trade ex-dividend in the next 3 days. The ex-dividend date is usually set to be one business day before the record date which is the cut-off date on which you must be present on the company's books as a shareholder in order to receive the dividend. It is important to be aware of the ex-dividend date because any trade on the stock needs to have been settled on or before the record date. Thus, you can purchase Tatton Asset Management's shares before the 23rd of November in order to receive the dividend, which the company will pay on the 8th of December.
The company's next dividend payment will be UK£0.08 per share. Last year, in total, the company distributed UK£0.14 to shareholders. Looking at the last 12 months of distributions, Tatton Asset Management has a trailing yield of approximately 2.9% on its current stock price of £5.055. If you buy this business for its dividend, you should have an idea of whether Tatton Asset Management's dividend is reliable and sustainable. So we need to investigate whether Tatton Asset Management can afford its dividend, and if the dividend could grow.
Check out our latest analysis for Tatton Asset Management
Dividends are typically paid out of company income, so if a company pays out more than it earned, its dividend is usually at a higher risk of being cut. Tatton Asset Management is paying out an acceptable 65% of its profit, a common payout level among most companies.
When a company paid out less in dividends than it earned in profit, this generally suggests 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 business enters a downturn.
Click here to see the company's payout ratio, plus analyst estimates of its future dividends.
Have Earnings And Dividends Been Growing?
Companies with consistently growing earnings per share generally make the best dividend stocks, as they usually find it easier to grow dividends per share. If business enters a downturn and the dividend is cut, the company could see its value fall precipitously. It's encouraging to see Tatton Asset Management has grown its earnings rapidly, up 39% a year for the past five years.
Another key way to measure a company's dividend prospects is by measuring its historical rate of dividend growth. In the past six years, Tatton Asset Management has increased its dividend at approximately 22% a year on average. It's exciting to see that both earnings and dividends per share have grown rapidly over the past few years.
To Sum It Up
From a dividend perspective, should investors buy or avoid Tatton Asset Management? Earnings per share are growing at an attractive rate, and Tatton Asset Management is paying out a bit over half its profits. In summary, Tatton Asset Management appears to have some promise as a dividend stock, and we'd suggest taking a closer look at it.
With that in mind, a critical part of thorough stock research is being aware of any risks that stock currently faces. Case in point: We've spotted 1 warning sign for Tatton Asset Management you should be aware of.
If you're in the market for strong dividend payers, we recommend checking our selection of top dividend stocks.
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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.
