Some investors rely on dividends for growing their wealth, and if you're one of those dividend sleuths, you might be intrigued to know that St. James's Place plc (LON:STJ) is about to go ex-dividend in just 3 days. The ex-dividend date is two business days before a company's record date in most cases, which is the date on which the company determines which shareholders are entitled to receive a dividend. The ex-dividend date is important as the process of settlement involves at least two full business days. So if you miss that date, you would not show up on the company's books on the record date. Meaning, you will need to purchase St. James's Place's shares before the 7th of August to receive the dividend, which will be paid on the 19th of September.

The company's upcoming dividend is UK£0.06 a share, following on from the last 12 months, when the company distributed a total of UK£0.18 per share to shareholders. Based on the last year's worth of payments, St. James's Place has a trailing yield of 1.4% on the current stock price of UK£12.98. If you buy this business for its dividend, you should have an idea of whether St. James's Place's dividend is reliable and sustainable. So we need to check whether the dividend payments are covered, and if earnings are growing.

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If a company pays out more in dividends than it earned, then the dividend might become unsustainable - hardly an ideal situation. St. James's Place paid out just 19% of its profit last year, which we think is conservatively low and leaves plenty of margin for unexpected circumstances.

Companies that pay out less in dividends than they earn in profits generally have more sustainable dividends. The lower the payout ratio, the more wiggle room the business has before it could be forced to cut the dividend.

View our latest analysis for St. James's Place

Click here to see the company's payout ratio, plus analyst estimates of its future dividends.LSE:STJ Historic Dividend August 3rd 2025

Have Earnings And Dividends Been Growing?

Companies with consistently growing earnings per share generally make the best dividend stocks, as they usually find it easier to grow dividends per share. Investors love dividends, so if earnings fall and the dividend is reduced, expect a stock to be sold off heavily at the same time. That's why it's comforting to see St. James's Place's earnings have been skyrocketing, up 29% per annum for the past five years.

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The main way most investors will assess a company's dividend prospects is by checking the historical rate of dividend growth. St. James's Place's dividend payments per share have declined at 2.5% per year on average over the past 10 years, which is uninspiring. St. James's Place is a rare case where dividends have been decreasing at the same time as earnings per share have been improving. It's unusual to see, and could point to unstable conditions in the core business, or more rarely an intensified focus on reinvesting profits.

The Bottom Line

Is St. James's Place worth buying for its dividend? Companies like St. James's Place that are growing rapidly and paying out a low fraction of earnings, are usually reinvesting heavily in their business. Perhaps even more importantly - this can sometimes signal management is focused on the long term future of the business. St. James's Place ticks a lot of boxes for us from a dividend perspective, and we think these characteristics should mark the company as deserving of further attention.

Ever wonder what the future holds for St. James's Place? See what the six analysts we track are forecasting,  with this visualisation of its historical and future estimated earnings and cash flow

Generally, we wouldn't recommend just buying the first dividend stock you see. Here's a curated list of interesting stocks that are strong dividend payers.

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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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