Schroders Dividend (LON:SDR) Approaches – Shares Down In Lead Up To Ex-Div

Schroders' dividend (LON:SDR) of £0.065 per share, slated for distribution to shareholders on the 26th of September is for holders of record on the 21st August. That means the stock will be ex-dividend as of 22nd, and any new entrants will not benefit thereafter. This announcement is particularly significant for investors as the annual dividend yield of 6.2% stands comfortably above the industry average, shedding light on the company’s robust dividend policy.

Often in the lead up to the ex-dividend date, there can be a mini rally in a stock as those seeking to take advantage of dividend capture may look to acquire shares. In the case of Shroders share price, the last month has seen a decline of 11%, with the last 5 days showing a mild shift to green (+2.18 %). The longer term trend over the 1 year and 5 year has been a case of bears in charge, so it would be wise to take this into consideration.

Historically, Schroders has maintained a high payout ratio, dispensing 90% of its earnings and 40% of free cash flows in dividends. While such a high payout ratio often raises questions about sustainability, the company’s consistent dividend payment history underscores its confidence in the ability to continue rewarding shareholders.

In terms of growth, the company's commitment to increasing shareholder value is evident in the steady rise of its dividend payments—a journey from £0.0986 in 2014 to the most recent figure of £0.215, translating to a robust average yearly growth rate of approximately 8.1%.

Schroders’ long-standing tradition of consistent dividends speaks volumes about the company’s operational stability and prospects. Even though prior earnings per share have witnessed a downward trend, there is an air of anticipation for an upturn, in alignment with the predicted rise in earnings in the forthcoming year.

While dividends are indeed an attractive proposition, they are but one facet of a company’s financial health. Investors are prompted to adopt a holistic view and account for various other factors when evaluating potential investments. It is mentioned that Schroders has generated adequate cash to cover its dividends, yet it may still not qualify as a top-tier dividend stock.

While the upcoming dividend announcement from Schroders is encouraging news for current and potential investors, it should be weighed alongside other key metrics and company developments.