Progress Software's (NASDAQ:PRGS) Dividend Will Be $0.175

Progress Software Corporation's (NASDAQ:PRGS) investors are due to receive a payment of $0.175 per share on 17th of June. Based on this payment, the dividend yield on the company's stock will be 1.3%, which is an attractive boost to shareholder returns.

Check out our latest analysis for Progress Software

Progress Software's Earnings Easily Cover The Distributions

While it is great to have a strong dividend yield, we should also consider whether the payment is sustainable. Based on the last payment, Progress Software 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 71.4%. If the dividend continues on this path, the payout ratio could be 28% by next year, which we think can be pretty sustainable going forward.

historic-dividend

Progress Software Is Still Building Its Track Record

The dividend's track record has been pretty solid, but with only 8 years of history we want to see a few more years of history before making any solid conclusions. The dividend has gone from an annual total of $0.50 in 2016 to the most recent total annual payment of $0.70. This means that it has been growing its distributions at 4.3% per annum over that time. Progress Software hasn't been paying a dividend for very long, so we wouldn't get to excited about its record of growth just yet.

Progress Software Could Grow Its Dividend

Investors could be attracted to the stock based on the quality of its payment history. Progress Software has seen EPS rising for the last five years, at 9.4% per annum. 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.

We Really Like Progress Software's Dividend

Overall, we like to see the dividend staying consistent, and we think Progress Software might even raise payments in the future. 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.

Market movements attest to how highly valued a consistent dividend policy is compared to one which is more unpredictable. However, there are other things to consider for investors when analysing stock performance. As an example, we've identified 3 warning signs for Progress Software that you should be aware of before investing. Is Progress Software not quite the opportunity you were looking for? Why not check out our selection of top dividend stocks.

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.