U.S. Markets closed
  • S&P Futures

    3,658.75
    +4.50 (+0.12%)
     
  • Dow Futures

    29,285.00
    0.00 (0.00%)
     
  • Nasdaq Futures

    11,238.75
    +10.50 (+0.09%)
     
  • Russell 2000 Futures

    1,683.80
    +1.70 (+0.10%)
     
  • Crude Oil

    81.55
    +0.32 (+0.39%)
     
  • Gold

    1,671.50
    +2.90 (+0.17%)
     
  • Silver

    18.83
    +0.12 (+0.63%)
     
  • EUR/USD

    0.9815
    -0.0004 (-0.0393%)
     
  • 10-Yr Bond

    3.7470
    +0.0420 (+1.13%)
     
  • Vix

    31.84
    +1.66 (+5.50%)
     
  • GBP/USD

    1.1150
    +0.0027 (+0.2408%)
     
  • USD/JPY

    144.6710
    +0.2280 (+0.1579%)
     
  • BTC-USD

    19,476.28
    -82.76 (-0.42%)
     
  • CMC Crypto 200

    444.97
    -1.02 (-0.23%)
     
  • FTSE 100

    6,881.59
    -123.80 (-1.77%)
     
  • Nikkei 225

    26,051.62
    -370.43 (-1.40%)
     

Wickes Group's (LON:WIX) Upcoming Dividend Will Be Larger Than Last Year's

·2 min read

The board of Wickes Group plc (LON:WIX) has announced that it will be increasing its dividend by 71% on the 4th of November to £0.036, up from last year's comparable payment of £0.021. This will take the dividend yield to an attractive 8.5%, providing a nice boost to shareholder returns.

View our latest analysis for Wickes Group

Wickes Group'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. The last dividend was quite easily covered by Wickes Group's earnings. This indicates that a lot of the earnings are being reinvested into the business, with the aim of fueling growth.

Over the next year, EPS is forecast to expand by 17.9%. If the dividend continues along recent trends, we estimate the payout ratio could reach 91%, which is on the higher side, but certainly still feasible.

historic-dividend
historic-dividend

Wickes Group Doesn't Have A Long Payment History

Without a track record of dividend payments, we can't make a judgement on how stable it has been. This doesn't mean that the company can't pay a good dividend, but just that we want to wait until it can prove itself.

The Dividend Looks Likely To Grow

The company's investors will be pleased to have been receiving dividend income for some time. Wickes Group has impressed us by growing EPS at 28% per year over the past five years. The company's earnings per share has grown rapidly in recent years, and it has a good balance between reinvesting and paying dividends to shareholders, so we think that Wickes Group could prove to be a strong dividend payer.

We Really Like Wickes Group's Dividend

In summary, it is always positive to see the dividend being increased, and we are particularly pleased with its overall sustainability. 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.

It's important to note that companies having a consistent dividend policy will generate greater investor confidence than those having an erratic one. Meanwhile, despite the importance of dividend payments, they are not the only factors our readers should know when assessing a company. Taking the debate a bit further, we've identified 2 warning signs for Wickes Group that investors need to be conscious of moving forward. Looking for more high-yielding dividend ideas? Try our collection of strong dividend payers.

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

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.

Join A Paid User Research Session
You’ll receive a US$30 Amazon Gift card for 1 hour of your time while helping us build better investing tools for the individual investors like yourself. Sign up here