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Keller Group plc, a prominent name in the Industrial sector, has declared a dividend payment of £0.166 per share, scheduled for September 13th. Despite this increase, the current dividend yield is 2.9%, which remains below the industry average.
Impact of Stock Price on Dividend Yield
While the dividend yield offers a perspective for income-focused stakeholders, it is essential to consider the effect of stock price movements on overall returns. Keller Group’s stock price has surged by 38% over the past three months. This sharp rise in stock price can lead to a lower dividend yield, even though the dividend amount has increased.
Sustainability Dividend Payments
An evaluation of Keller Group (LSE:KLR)’s dividend sustainability reveals that the company’s earnings comfortably cover its dividend payments. This indicates that a substantial portion of earnings is being reinvested into the business rather than merely being distributed as dividends. Projections suggest an increase in earnings per share by 4.3% over the next year, with a payout ratio expected to be around 28%. This ratio is considered sustainable, providing confidence in the company’s ability to maintain its dividend payments.
Keller Group’s Track Record of Consistent Dividends
Keller Group has demonstrated a robust track record of consistent dividend payments with minimal fluctuations. Since 2014, the annual dividend has increased from £0.24 to £0.452, representing a compound annual growth rate (CAGR) of approximately 6.5% per year. This steady growth, without significant cuts, underscores Keller Group’s commitment to providing reliable dividends, which enhances its appeal to income-focused stakeholders. Dividend and Earnings Relationship
Looking ahead, the potential for future dividend increases is reinforced by Keller Group's recent earnings performance. The company has achieved substantial earnings per share growth of 37% annually over the past five years. The low payout ratio, combined with increasing earnings, provides Keller Group with the flexibility to potentially raise its dividend further, making it an attractive option for those seeking stable income.
Keller Group’s recent dividend announcement reflects a stable and growing distribution policy, supported by strong earnings performance and a consistent historical track record. The company’s ability to generate sufficient cash flow to cover its dividend payments reinforces its position as a reliable income stock. This combination of factors makes Keller Group a compelling consideration for those looking for steady and sustainable dividend income.
