On the 26 January 2018, RPC Group Plc (LSE:RPC) will be paying shareholders an upcoming dividend amount of £0.08 per share. However, investors must have bought the company’s stock before 28 December 2017 in order to qualify for the payment. That means you have only 3 days left! What does this mean for current shareholders and potential investors? Below, I will explain how holding RPC Group can impact your portfolio income stream, by analysing the stock’s most recent financial data and dividend attributes. Check out our latest analysis for RPC Group
How I analyze a dividend stock
When assessing a stock as a potential addition to my dividend Portfolio, I look at these five areas:
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Is it paying an annual yield above 75% of dividend payers?
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Has its dividend been stable over the past (i.e. no missed payments or significant payout cuts)?
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Has it increased its dividend per share amount over the past?
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Does earnings amply cover its dividend payments?
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Will the company be able to keep paying dividend based on the future earnings growth?
How well does RPC Group fit our criteria?
The company currently pays out 51.34% of its earnings as a dividend, which means that the dividend is covered by earnings. In the near future, analysts are predicting lower payout ratio of 40.31%, leading to a dividend yield of 3.37%. However, EPS should increase to £0.63, meaning that the lower payout ratio does not necessarily implicate a lower dividend payment. If dividend is a key criteria in your investment consideration, then you need to make sure the dividend stock you’re eyeing out is reliable in its payments. RPC has increased its DPS from £0.09 to £0.24 in the past 10 years. During this period it has not missed a payment, as one would expect for a company increasing its dividend. These are all positive signs of a great, reliable dividend stock. Compared to its peers, RPC Group produces a yield of 2.74%, which is high for packaging stocks but still below the market’s top dividend payers.
What this means for you:
Are you a shareholder? Investors of RPC Group can continue to expect strong dividends from the stock moving forward. With its favorable dividend characteristics, RPC Group is one worth keeping around in your income portfolio. But, depending on your current holdings, it may be valuable exploring other dividend stocks to enhance your diversification, or even look at high-growth stocks to complement your steady income stocks. I encourage you to continue your research by taking a look at my interactive free list of dividend rockstars as well as high-growth stocks to potentially add to your holdings.