Some investors rely on dividends for growing their wealth, and if you're one of those dividend sleuths, you might be intrigued to know that T. Rowe Price Group, Inc. (NASDAQ:TROW) is about to go ex-dividend in just 3 days. The ex-dividend date is usually set to be one business day before the record date which is the cut-off date on which you must be present on the company's books as a shareholder in order to receive the dividend. The ex-dividend date is important as the process of settlement involves two full business days. So if you miss that date, you would not show up on the company's books on the record date. Thus, you can purchase T. Rowe Price Group's shares before the 24th of June in order to receive the dividend, which the company will pay on the 7th of July.
The company's next dividend payment will be US$3.00 per share, and in the last 12 months, the company paid a total of US$4.32 per share. Based on the last year's worth of payments, T. Rowe Price Group stock has a trailing yield of around 2.3% on the current share price of $190.02. 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 T. Rowe Price Group can afford its dividend, and if the dividend could grow.
See our latest analysis for T. Rowe Price Group
Dividends are typically paid out of company income, so if a company pays out more than it earned, its dividend is usually at a higher risk of being cut. T. Rowe Price Group paid out a comfortable 32% of its profit last year.
Generally speaking, the lower a company's payout ratios, the more resilient its dividend usually is.
Click here to see the company's payout ratio, plus analyst estimates of its future dividends.
Have Earnings And Dividends Been Growing?
Stocks in companies that generate sustainable earnings growth often make the best dividend prospects, as it is easier to lift the dividend when earnings are rising. If earnings decline and the company is forced to cut its dividend, investors could watch the value of their investment go up in smoke. It's encouraging to see T. Rowe Price Group has grown its earnings rapidly, up 20% a year for the past five years.
Many investors will assess a company's dividend performance by evaluating how much the dividend payments have changed over time. T. Rowe Price Group has delivered 15% dividend growth per year on average over the past 10 years. It's exciting to see that both earnings and dividends per share have grown rapidly over the past few years.