The board of Global Payments (NYSE:GPN) Inc. has declared a dividend payment slated for December 29th, amounting to $0.25 per share, which is currently below the industry average with a yield of 0.9%. This move comes after a history of dividend volatility, including cuts over the past ten years. Despite these fluctuations, the company's current payouts are supported by robust cash flows.
Looking ahead, forecasts indicate a promising surge in earnings per share for the next year, potentially reaching an increase of 146.4%. This anticipated growth could strengthen investor confidence, with predictions of a payout ratio hovering around a manageable 16%. The company's dividend strategy has evolved significantly over the last decade, climbing from an annual rate of $0.04 to $1.00, demonstrating aggressive growth. Nevertheless, past reductions in dividends have shed light on concerns regarding the long-term sustainability and consistency of future increases.
Investors have been cautious due to a recent average annual decline in earnings per share of 2.9%, which has cast doubt on the prospect of stable dividend growth. However, the positive forecast for a substantial rise in earnings next year provides a glimmer of hope for those looking at the stock for its income potential.
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