The board of The Hackett Group, Inc. (NASDAQ:HCKT) has announced that it will pay a dividend on the 5th of July, with investors receiving $0.11 per share. This means the dividend yield will be fairly typical at 2.0%.

View our latest analysis for Hackett Group

Hackett Group's Payment Has Solid Earnings Coverage

Unless the payments are sustainable, the dividend yield doesn't mean too much. However, Hackett Group's earnings easily cover the dividend. As a result, a large proportion of what it earned was being reinvested back into the business.

Looking forward, earnings per share is forecast to rise by 7.9% over the next year. If the dividend continues along recent trends, we estimate the payout ratio will be 36%, which is in the range that makes us comfortable with the sustainability of the dividend.

Hackett Group Has A Solid Track Record

The company has an extended history of paying stable dividends. Since 2014, the annual payment back then was $0.10, compared to the most recent full-year payment of $0.44. This implies that the company grew its distributions at a yearly rate of about 16% over that duration. It is good to see that there has been strong dividend growth, and that there haven't been any cuts for a long time.

We Could See Hackett Group's Dividend Growing

Investors could be attracted to the stock based on the quality of its payment history. Hackett Group has impressed us by growing EPS at 6.5% per year over the past five years. With a decent amount of growth and a low payout ratio, we think this bodes well for Hackett Group's prospects of growing its dividend payments in the future.

Hackett Group Looks Like A Great Dividend Stock

In summary, it is good to see that the dividend is staying consistent, and we don't think there is any reason to suspect this might change over the medium term. Distributions are quite easily covered by earnings, which are also being converted to cash flows. Taking this all into consideration, this looks like it could be a good dividend opportunity.

Market movements attest to how highly valued a consistent dividend policy is compared to one which is more unpredictable. Still, investors need to consider a host of other factors, apart from dividend payments, when analysing a company. Now, if you want to look closer, it would be worth checking out our free research on Hackett Group management tenure, salary, and performance. 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.