SS&C Technologies Holdings, Inc. (NASDAQ:SSNC) announced that it will increase its dividend to $0.25 on September 16, which is 4.2% higher than last year’s comparable payout amount of $0.24. Although the dividend was increased, the yield is still quite low at just 1.3%.

Check out our latest analysis for SS&C Technologies Holdings

SS&C Technologies Holdings’ dividend is well covered by earnings

If the dividend is predictable over a long period of time, even low dividends can be attractive. However, SS&C Technologies Holdings’ profits easily cover the dividend. As a result, a large portion of the profits have been reinvested in the company.

Next year, earnings per share are expected to grow by 47.9%. If the dividend follows recent trends, we estimate the payout ratio will be 27%, a range that makes us comfortable with the sustainability of the dividend.

SS&C Technologies Holdings has a solid track record

The company has a long history of paying dividends with very little fluctuation. Since 2014, the annual payment at that time was $0.25, compared to the last full-year payment of $0.96. This represents a compound annual growth rate (CAGR) of approximately 14% per year over that period. Long-term, fast-growing dividends are a very valuable trait for a dividend stock.

The dividend is likely to increase

Investors who have held shares of the company over the past few years will be pleased with the dividend income they have received. SS&C Technologies Holdings has impressed us with EPS growth of 17% per year over the past five years. SS&C Technologies Holdings definitely has the potential to increase its dividend in the future, as earnings are on an upward trend and the payout ratio is low.

We really like SS&C Technologies Holdings’ dividend

Overall, we think this could be an attractive dividend stock, and it gets even better by paying a higher dividend this year. The company easily earns enough to cover its dividend payments, and it’s great to see those earnings being converted into cash flow. Taking all of this into account, this looks like it could be a good dividend opportunity.

Companies with a stable dividend policy are likely to attract more interest from investors than those with a more inconsistent approach. At the same time, there are other factors that our readers should consider before putting capital into a stock. Just as an example, we are on 2 warning signs for SS&C Technologies Holdings You should be aware of these, and one of them is significant. Looking for more high-yield dividend ideas? Try our Collection of strong dividend payers.

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This Simply Wall St article is of a general nature. We comment solely on the basis of historical data and analyst forecasts, using an unbiased methodology. Our articles do not constitute financial advice. It is not a recommendation to buy or sell any stock and does not take into account your objectives or financial situation. Our goal is to provide you with long-term analysis based on fundamental data. Note that our analysis may not take into account the latest price-sensitive company announcements or qualitative materials. Simply Wall St does not hold any of the stocks mentioned.