Lorne Park Capital Partners Announces Dividend – Enjoy the Joy with Caution

Lorne Park Capital Partners investors have reason to be pleased: the Board of Directors has decided to distribute a dividend as of October 31. An impressive 0.008 CAD per share will be paid, which corresponds to a dividend yield of 2.3%. Although this sounds encouraging, it is worth taking a closer look at the background. So far, the payout ratio of profits has been a substantial 88%, while only 33% of free cash flow has been used for dividends. This leaves room for future investments in the company. However, the dividends could impact the balance sheet if the payout ratio, as forecasted, rises to 98%. The earnings per share growth target for the coming year of 19.5% supports this assumption. The dividend policy of Lorne Park Capital Partners shows that no major cuts have been made in the past four years. However, the dividend history is relatively short, at only four years. Since 2020, the annual payouts have increased from 0.02 CAD to 0.032 CAD, representing an annual growth of 12%. Given the short history, there is uncertainty about whether this growth is sustainable in the long term. Even though the past few years have shown stable dividend development, the long-term perspective might be less promising. The future growth prospects could be limited by the high payout ratios. In summary, it can be noted that Lorne Park Capital Partners might not currently meet all the criteria of a perfect income source for dividend hunters. However, the steady increase in payments is impressive, demonstrating the value of a consistent dividend policy. Caution is still advised, as Lorne Park Capital Partners has three warning signs, one of which may be significant. For investors looking for alternative strong dividend payers, our portfolio of substantial dividend payers may be of interest.