Yahoo Finance TP ICAP Group PLC (LON:TCAP) Pays A UK£0.10 Dividend In Just Four Days
TP ICAP Group PLC (LON:TCAP) is about to trade ex-dividend in the next 4 days. Typically, the ex-dividend date is one business day before the record date which is the date on which a company determines the shareholders eligible to receive a dividend. The ex-dividend date is an important date to be aware of as any purchase of the stock made on or after this date might mean a late settlement that doesn't show on the record date. Therefore, if you purchase TP ICAP Group's shares on or after the 11th of April, you won't be eligible to receive the dividend, when it is paid on the 24th of May.
The company's next dividend payment will be UK£0.10 per share. Last year, in total, the company distributed UK£0.15 to shareholders. Calculating the last year's worth of payments shows that TP ICAP Group has a trailing yield of 6.6% on the current share price of UK£2.255. Dividends are an important source of income to many shareholders, but the health of the business is crucial to maintaining those dividends. So we need to investigate whether TP ICAP Group can afford its dividend, and if the dividend could grow.
View our latest analysis for TP ICAP Group
Dividends are typically paid from company earnings. If a company pays more in dividends than it earned in profit, then the dividend could be unsustainable. TP ICAP Group distributed an unsustainably high 156% of its profit as dividends to shareholders last year. Without more sustainable payment behaviour, the dividend looks precarious.
Generally, the higher a company's payout ratio, the more the dividend is at risk of being reduced.
Click here to see the company's payout ratio, plus analyst estimates of its future dividends.
Have Earnings And Dividends Been Growing?
Businesses with strong growth prospects usually make the best dividend payers, because it's easier to grow dividends when earnings per share are improving. If earnings decline and the company is forced to cut its dividend, investors could watch the value of their investment go up in smoke. For this reason, we're glad to see TP ICAP Group's earnings per share have risen 11% per annum over the last five years.
The main way most investors will assess a company's dividend prospects is by checking the historical rate of dividend growth. TP ICAP Group has delivered 4.1% dividend growth per year on average over the past seven years. It's good to see both earnings and the dividend have improved - although the former has been rising much quicker than the latter, possibly due to the company reinvesting more of its profits in growth.
To Sum It Up
Is TP ICAP Group an attractive dividend stock, or better left on the shelf? It's been growing earnings per share at a pleasant rate, although its dividend payout was not well covered by earnings. We're unconvinced on the company's merits, and think there might be better opportunities out there.
With that being said, if dividends aren't your biggest concern with TP ICAP Group, you should know about the other risks facing this business. In terms of investment risks, we've identified 3 warning signs with TP ICAP Group and understanding them should be part of your investment process.
If you're in the market for strong dividend payers, we recommend checking 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.
