Yahoo Finance Partners Group Holding (VTX:PGHN) Is Paying Out A Larger Dividend Than Last Year
Partners Group Holding AG (VTX:PGHN) will increase its dividend from last year's comparable payment on the 31st of May to CHF37.00. This will take the dividend yield to an attractive 4.4%, providing a nice boost to shareholder returns.
View our latest analysis for Partners Group Holding
Partners Group Holding's Earnings Easily Cover The Distributions
We like to see robust dividend yields, but that doesn't matter if the payment isn't sustainable. Prior to this announcement, Partners Group Holding's dividend was making up a very large proportion of earnings and perhaps more concerning was that it was 99% of cash flows. Paying out such a high proportion of cash flows certainly exposes the company to cutting the dividend if cash flows were to reduce.
Over the next year, EPS is forecast to expand by 42.9%. Assuming the dividend continues along recent trends, our estimates say the payout ratio could reach 77% - on the higher side, but we wouldn't necessarily say this is unsustainable.
Partners Group Holding Has A Solid Track Record
The company has an extended history of paying stable dividends. Since 2013, the dividend has gone from CHF6.25 total annually to CHF37.00. This implies that the company grew its distributions at a yearly rate of about 19% over that duration. We can see that payments have shown some very nice upward momentum without faltering, which provides some reassurance that future payments will also be reliable.
We Could See Partners Group Holding's Dividend Growing
The company's investors will be pleased to have been receiving dividend income for some time. Partners Group Holding has impressed us by growing EPS at 6.5% per year over the past five years. EPS has been growing at a reasonable rate, although with most of the profits being paid out to shareholders, growth prospects could be more limited in the future.
The Dividend Could Prove To Be Unreliable
Overall, we always like to see the dividend being raised, but we don't think Partners Group Holding will make a great income stock. We can't deny that the payments have been very stable, but we are a little bit worried about the very high payout ratio. This company is not in the top tier of income providing stocks.
Investors generally tend to favour companies with a consistent, stable dividend policy as opposed to those operating an irregular one. Still, investors need to consider a host of other factors, apart from dividend payments, when analysing a company. For example, we've picked out 1 warning sign for Partners Group Holding that investors should know about before committing capital to this stock. Is Partners Group Holding not quite the opportunity you were looking for? Why not check out our selection of top dividend stocks.
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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.
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