The board of Reckitt Benckiser Group plc (LON:RKT) has announced that it will pay a dividend on the 18th of September, with investors receiving £0.844 per share. This makes the dividend yield 3.6%, which is above the industry average.

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Reckitt Benckiser Group's Future Dividend Projections Appear Well Covered By Earnings

If the payments aren't sustainable, a high yield for a few years won't matter that much. Based on the last payment, Reckitt Benckiser Group's profits didn't cover the dividend, but the company was generating enough cash instead. Given that the dividend is a cash outflow, we think that cash is more important than accounting measures of profit when assessing the dividend, so this is a mitigating factor.

The next year is set to see EPS grow by 119.0%. If the dividend continues along recent trends, we estimate the payout ratio will be 53%, which would make us comfortable with the sustainability of the dividend, despite the levels currently being quite high.LSE:RKT Historic Dividend July 27th 2025

View our latest analysis for Reckitt Benckiser Group

Reckitt Benckiser Group Has A Solid Track Record

The company has a sustained record of paying dividends with very little fluctuation. The annual payment during the last 10 years was £1.39 in 2015, and the most recent fiscal year payment was £2.02. This works out to be a compound annual growth rate (CAGR) of approximately 3.8% a year over that time. Although we can't deny that the dividend has been remarkably stable in the past, the growth has been pretty muted.

Reckitt Benckiser Group's Dividend Might Lack Growth

Investors who have held shares in the company for the past few years will be happy with the dividend income they have received. Reckitt Benckiser Group has impressed us by growing EPS at 37% per year over the past five years. While EPS is growing rapidly, Reckitt Benckiser Group paid out a very high 113% of its income as dividends. If earnings continue to grow, this dividend may be sustainable, but we think a payout this high definitely bears watching.

Our Thoughts On Reckitt Benckiser Group's Dividend

In summary, while it's always good to see the dividend being raised, we don't think Reckitt Benckiser Group's payments are rock solid. The company has been bring in plenty of cash to cover the dividend, but we don't necessarily think that makes it a great dividend stock. Overall, we don't think this company has the makings of a good income stock.

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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 3 warning signs for Reckitt Benckiser Group that investors should take into consideration. If you are a dividend investor, you might also want to look at our curated list of high yield 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.

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