26-05-2025
BGC Group (NASDAQ:BGC) Has Affirmed Its Dividend Of $0.02
BGC Group, Inc.'s (NASDAQ:BGC) investors are due to receive a payment of $0.02 per share on 10th of June. This payment means the dividend yield will be 0.9%, which is below the average for the industry.
We've discovered 2 warning signs about BGC Group. View them for free.
It would be nice for the yield to be higher, but we should also check if higher levels of dividend payment would be sustainable. However, prior to this announcement, BGC Group's dividend was comfortably covered by both cash flow and earnings. As a result, a large proportion of what it earned was being reinvested back into the business.
The next year is set to see EPS grow by 66.6%. If the dividend continues along recent trends, we estimate the payout ratio will be 14%, which is in the range that makes us comfortable with the sustainability of the dividend.
See our latest analysis for BGC Group
Although the company has a long dividend history, it has been cut at least once in the last 10 years. The annual payment during the last 10 years was $0.48 in 2015, and the most recent fiscal year payment was $0.08. Dividend payments have fallen sharply, down 83% over that time. A company that decreases its dividend over time generally isn't what we are looking for.
With a relatively unstable dividend, and a poor history of shrinking dividends, it's even more important to see if EPS is growing. It's encouraging to see that BGC Group has been growing its earnings per share at 14% a year over the past five years. BGC Group definitely has the potential to grow its dividend in the future with earnings on an uptrend and a low payout ratio.
Overall, we think that this is a great income investment, and we think that maintaining the dividend this year may have been a conservative choice. Earnings are easily covering distributions, and the company is generating plenty of cash. All of these factors considered, we think this has solid potential as a dividend stock.
It's important to note that companies having a consistent dividend policy will generate greater investor confidence than those having an erratic one. Meanwhile, despite the importance of dividend payments, they are not the only factors our readers should know when assessing a company. Just as an example, we've come across 2 warning signs for BGC Group you should be aware of, and 1 of them doesn't sit too well with us. If you are a dividend investor, you might also want to look at our curated list of high yield dividend stocks.
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