Read This Before Considering T. Rowe Price Group, Inc. (NASDAQ:TROW) For Its Upcoming US$1.24 Dividend #UKFinance

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 four days. The ex-dividend date is one business day before a company’s record date, which is the date on which the company determines which shareholders are entitled to receive a dividend. It is important to be aware of the ex-dividend date because any trade on the stock needs to have been settled on or before the record date. Thus, you can purchase T. Rowe Price Group’s shares before the 13th of December in order to receive the dividend, which the company will pay on the 27th of December.

The company’s next dividend payment will be US$1.24 per share. Last year, in total, the company distributed US$4.96 to shareholders. Looking at the last 12 months of distributions, T. Rowe Price Group has a trailing yield of approximately 4.0% on its current stock price of US$123.83. Dividends are an important source of income to many shareholders, but the health of the business is crucial to maintaining those dividends. As a result, readers should always check whether T. Rowe Price Group has been able to grow its dividends, or if the dividend might be cut.

View our latest analysis for T. Rowe Price Group

Dividends are usually paid out of company profits, so if a company pays out more than it earned then its dividend is usually at greater risk of being cut. T. Rowe Price Group is paying out an acceptable 54% of its profit, a common payout level among most companies.

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.

Companies with consistently growing earnings per share generally make the best dividend stocks, as they usually find it easier to grow dividends per share. If earnings decline and the company is forced to cut its dividend, investors could watch the value of their investment go up in smoke. With that in mind, we’re encouraged by the steady growth at T. Rowe Price Group, with earnings per share up 4.4% on average over the last five years.

Another key way to measure a company’s dividend prospects is by measuring its historical rate of dividend growth. T. Rowe Price Group has delivered 11% dividend growth per year on average over the past 10 years. It’s encouraging to see the company lifting dividends while earnings are growing, suggesting at least some corporate interest in rewarding shareholders.

Story continues