Maximus, Inc.'s (NYSE:MMS) investors are due to receive a payment of $0.30 per share on 28th of February. Based on this payment, the dividend yield will be 1.5%, which is fairly typical for the industry.

Check out our latest analysis for Maximus

Maximus' Payment Could Potentially Have Solid Earnings Coverage

We aren't too impressed by dividend yields unless they can be sustained over time. However, Maximus' earnings easily cover the dividend. This means that most of what the business earns is being used to help it grow.

The next year is set to see EPS grow by 1.6%. Assuming the dividend continues along recent trends, we think the payout ratio could be 28% by next year, which is in a pretty sustainable range.

Maximus Has A Solid Track Record

The company has an extended history of paying stable dividends. Since 2015, the dividend has gone from $0.18 total annually to $1.20. This means that it has been growing its distributions at 21% per annum over that time. We can see that payments have shown some very nice upward momentum without faltering, which provides some reassurance that future payments will also be reliable.

Maximus Could Grow Its Dividend

Investors who have held shares in the company for the past few years will be happy with the dividend income they have received. Maximus has seen EPS rising for the last five years, at 6.4% per annum. Growth in EPS bodes well for the dividend, as does the low payout ratio that the company is currently reporting.

Maximus Looks Like A Great Dividend Stock

Overall, we like to see the dividend staying consistent, and we think Maximus might even raise payments in the future. Earnings are easily covering distributions, and the company is generating plenty of cash. Taking this all into consideration, this looks like it could be a good dividend opportunity.

Companies possessing a stable dividend policy will likely enjoy greater investor interest than those suffering from a more inconsistent approach. However, there are other things to consider for investors when analysing stock performance. For instance, we've picked out 1 warning sign for Maximus that investors should take into consideration. Is Maximus not quite the opportunity you were looking for? Why not check out our selection of top dividend stocks.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.