Yellow Pages (TSE:Y) dividend will be C$0.15

The advice of Yellow Pages Limited (TSE:Y) announced that it will pay a dividend of C$0.15 per share on June 15. Based on this payout, the dividend yield on the company’s stock will be 4.3%, which is an attractive increase in shareholder return.

See our latest analysis for the Yellow Pages

Yellow Pages Revenue Easily Covers Distributions

Impressive dividend yields are good, but that doesn’t matter much if payouts can’t be sustained. However, Yellow Pages profits easily cover the dividend. This means most of his income is kept to grow the business.

Over the next year, EPS could increase by 64.0% if recent trends continue. If the dividend continues to follow recent trends, we estimate the payout ratio to be 14%, which is within the range that allows us to be comfortable with the sustainability of the dividend.

historical-dividend

Pages Jaunes continues to build its rankings

The company has maintained a consistent dividend for a few years now, but we’d like to see a longer track record before relying on it. The dividend has increased from CA$0.44 in 2020 to the last annual payment of CA$0.60. This equates to a compound annual growth rate (CAGR) of approximately 17% per year during this period. Yellow Pages has increased its dividend quite quickly, which is exciting. However, the short payout history makes us wonder if this performance will persist through a full market cycle.

The dividend should increase

Investors might be attracted to the stock because of the quality of its payment history. Yellow Pages has impressed us by increasing EPS by 64% per year over the past five years. Rapid earnings growth and a low payout ratio suggest that this company has indeed reinvested in its business. If this continues, this company could have a bright future.

We really like the yellow pages dividend

In summary, it is good to see that the dividend remains constant, and we do not think there is any reason to suspect that this could change in the medium term. Profits easily cover distributions and the company generates plenty of cash. Overall, this checks a lot of the boxes we look for when choosing an income stock.

It is important to note that companies with a consistent dividend policy will generate greater investor confidence than those with an erratic policy. Meanwhile, despite the importance of dividend payments, these are not the only factors our readers should be aware of when evaluating a company. For example, we chose 1 yellow pages warning sign that investors should be aware of before committing capital to this security. Looking for more high yield dividend ideas? Try our collection of strong dividend payers.

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This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts only using unbiased methodology and our articles are not intended to be financial advice. It is not a recommendation to buy or sell stocks and does not take into account your objectives or financial situation. Our goal is to bring you targeted long-term analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price-sensitive companies or qualitative materials. Simply Wall St has no position in the stocks mentioned.

Calvin W. Soper