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Kelly Partners Group Holdings Limited's (ASX:KPG) investors are due to receive a payment of AU$0.0036 per share on 29th of April. The dividend yield is 1.3% based on this payment, which is a little bit low compared to the other companies in the industry.
See our latest analysis for Kelly Partners Group Holdings
Kelly Partners Group Holdings' Dividend Is Well Covered By Earnings
The dividend yield is a little bit low, but sustainability of the payments is also an important part of evaluating an income stock. Based on the last payment, Kelly Partners Group Holdings 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.
Looking forward, earnings per share is forecast to fall by 35.1% over the next year. Assuming the dividend continues along recent trends, we think the payout ratio could reach 87%, which is definitely on the higher side.
Kelly Partners Group Holdings Doesn't Have A Long Payment History
Looking back, the dividend has been stable, but the company hasn't been paying a dividend for very long so we can't be confident that the dividend will remain stable through all economic environments. Since 2018, the first annual payment was AU$0.04, compared to the most recent full-year payment of AU$0.071. This works out to be a compound annual growth rate (CAGR) of approximately 15% a year over that time. It is always nice to see strong dividend growth, but with such a short payment history we wouldn't be inclined to rely on it until a longer track record can be developed.
The Dividend Looks Likely To Grow
The company's investors will be pleased to have been receiving dividend income for some time. It's encouraging to see Kelly Partners Group Holdings has been growing its earnings per share at 34% a year over the past five years. Kelly Partners Group Holdings is clearly able to grow rapidly while still returning cash to shareholders, positioning it to become a strong dividend payer in the future.
Kelly Partners Group Holdings Looks Like A Great Dividend Stock
In summary, it is good to see that the dividend is staying consistent, and we don't think there is any reason to suspect this might change over the medium term. The distributions are easily covered by earnings, and there is plenty of cash being generated as well. However, it is worth noting that the earnings are expected to fall over the next year, which may not change the long term outlook, but could affect the dividend payment in the next 12 months. All in all, this checks a lot of the boxes we look for when choosing an income stock.