Victory Capital Holdings (NASDAQ:VCTR) Is Paying Out A Larger Dividend Than Last Year
Victory Capital Holdings, Inc. (NASDAQ:VCTR) has announced that it will be increasing its dividend from last year's comparable payment on the 25th of March to $0.335. This takes the dividend yield to 3.6%, which shareholders will be pleased with.
See our latest analysis for Victory Capital Holdings
Victory Capital Holdings' Dividend Is Well Covered By Earnings
We like to see robust dividend yields, but that doesn't matter if the payment isn't sustainable. However, Victory Capital Holdings' earnings easily cover the dividend. This means that most of its earnings are being retained to grow the business.
The next year is set to see EPS grow by 70.4%. If the dividend continues along recent trends, we estimate the payout ratio will be 35%, which is in the range that makes us comfortable with the sustainability of the dividend.
Victory Capital Holdings Doesn't Have A Long Payment History
Victory Capital Holdings' dividend has been pretty stable for a little while now, but we will continue to be cautious until it has been demonstrated for a few more years. Since 2019, the annual payment back then was $0.20, compared to the most recent full-year payment of $1.34. This implies that the company grew its distributions at a yearly rate of about 46% over that duration. The dividend has been growing rapidly, however with such a short payment history we can't know for sure if payment can continue to grow over the long term, so caution may be warranted.
The Dividend Looks Likely To Grow
Some investors will be chomping at the bit to buy some of the company's stock based on its dividend history. Victory Capital Holdings has seen EPS rising for the last five years, at 28% per annum. Earnings have been growing rapidly, and with a low payout ratio we think that the company could turn out to be a great dividend stock.
Victory Capital Holdings Looks Like A Great Dividend Stock
Overall, a dividend increase is always good, and we think that Victory Capital Holdings 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 of these factors considered, we think this has solid potential as a dividend stock.
Companies possessing a stable dividend policy will likely enjoy greater investor interest than those suffering from a more inconsistent approach. Still, investors need to consider a host of other factors, apart from dividend payments, when analysing a company. As an example, we've identified 2 warning signs for Victory Capital Holdings that you should be aware of before investing. Is Victory Capital Holdings not quite the opportunity you were looking for? Why not check out 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.
