It looks like Virtus Investment Partners, Inc. (NYSE:VRTS) is about to go ex-dividend in the next two days. The ex-dividend date is one business day before the record date, which is the cut-off date for shareholders to be present on the company's books to be eligible for a dividend payment. The ex-dividend date is an important date to be aware of as any purchase of the stock made on or after this date might mean a late settlement that doesn't show on the record date. Accordingly, Virtus Investment Partners investors that purchase the stock on or after the 31st of October will not receive the dividend, which will be paid on the 14th of November.

The company's next dividend payment will be US$2.40 per share. Last year, in total, the company distributed US$9.60 to shareholders. Looking at the last 12 months of distributions, Virtus Investment Partners has a trailing yield of approximately 5.6% on its current stock price of US$171.25. If you buy this business for its dividend, you should have an idea of whether Virtus Investment Partners's dividend is reliable and sustainable. As a result, readers should always check whether Virtus Investment Partners has been able to grow its dividends, or if the dividend might be cut.

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. That's why it's good to see Virtus Investment Partners paying out a modest 46% of its earnings.

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.

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. This is why it's a relief to see Virtus Investment Partners earnings per share are up 10.0% per annum over the last five years.

Many investors will assess a company's dividend performance by evaluating how much the dividend payments have changed over time. In the past 10 years, Virtus Investment Partners has increased its dividend at approximately 18% a year on average. It's encouraging to see the company lifting dividends while earnings are growing, suggesting at least some corporate interest in rewarding shareholders.

Final Takeaway

Is Virtus Investment Partners worth buying for its dividend? Virtus Investment Partners has seen its earnings per share grow slowly in recent years, and the company reinvests more than half of its profits in the business, which generally bodes well for its future prospects. We think this is a pretty attractive combination, and would be interested in investigating Virtus Investment Partners more closely.

So while Virtus Investment Partners looks good from a dividend perspective, it's always worthwhile being up to date with the risks involved in this stock.

A common investing mistake is buying the first interesting stock you see. Here you can find a full list of high-yield dividend stocks.

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.