The board of Rollins, Inc. (NYSE:ROL) has announced that the dividend on 10th of December will be increased to $0.165, which will be 10% higher than last year’s payment of $0.15 which covered the same period. Based on this payment, the dividend yield for the company will be 1.3%, which is fairly typical for the industry.
See our latest analysis for Rollins
Rollins’ Payment Could Potentially Have Solid Earnings Coverage
Unless the payments are sustainable, the dividend yield doesn’t mean too much. Prior to this announcement, Rollins’ dividend was comfortably covered by both cash flow and earnings. This indicates that quite a large proportion of earnings is being invested back into the business.
Looking forward, earnings per share is forecast to rise by 47.3% over the next year. If the dividend continues along recent trends, we estimate the payout ratio will be 50%, which is in the range that makes us comfortable with the sustainability…
