Why You Might Be Interested In CURO Group Holdings Corp. (NYSE:CURO) For Its Upcoming Dividend

Simply Wall St
·3 min read

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 CURO Group Holdings Corp. (NYSE:CURO) is about to go ex-dividend in just three days. Ex-dividend means that investors that purchase the stock on or after the 13th of May will not receive this dividend, which will be paid on the 27th of May.

CURO Group Holdings's next dividend payment will be US$0.11 per share. Last year, in total, the company distributed US$0.22 to shareholders. Looking at the last 12 months of distributions, CURO Group Holdings has a trailing yield of approximately 2.8% on its current stock price of $15.79. Dividends are a major contributor to investment returns for long term holders, but only if the dividend continues to be paid. That's why we should always check whether the dividend payments appear sustainable, and if the company is growing.

See our latest analysis for CURO Group Holdings

Dividends are typically paid out of company income, so if a company pays out more than it earned, its dividend is usually at a higher risk of being cut. CURO Group Holdings paid out just 14% of its profit last year, which we think is conservatively low and leaves plenty of margin for unexpected circumstances.

When a company paid out less in dividends than it earned in profit, this generally suggests its dividend is affordable. The lower the % of its profit that it pays out, the greater the margin of safety for the dividend if the business enters a downturn.

Click here to see the company's payout ratio, plus analyst estimates of its future dividends.

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Have Earnings And Dividends Been Growing?

Businesses with strong growth prospects usually make the best dividend payers, because it's easier to grow dividends when earnings per share are improving. If earnings fall far enough, the company could be forced to cut its dividend. It's encouraging to see CURO Group Holdings has grown its earnings rapidly, up 27% a year for the past five years.

Unfortunately CURO Group Holdings has only been paying a dividend for a year or so, so there's not much of a history to draw insight from.

The Bottom Line

Has CURO Group Holdings got what it takes to maintain its dividend payments? Companies like CURO Group Holdings that are growing rapidly and paying out a low fraction of earnings, are usually reinvesting heavily in their business. This strategy can add significant value to shareholders over the long term - as long as it's done without issuing too many new shares. Overall, CURO Group Holdings looks like a promising dividend stock in this analysis, and we think it would be worth investigating further.

In light of that, while CURO Group Holdings has an appealing dividend, it's worth knowing the risks involved with this stock. For instance, we've identified 3 warning signs for CURO Group Holdings (1 is a bit unpleasant) you should be aware of.

We wouldn't recommend just buying the first dividend stock you see, though. Here's a list of interesting dividend stocks with a greater than 2% yield and an upcoming dividend.

This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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