Victory Capital Holdings, Inc. (NASDAQ:VCTR) is about to trade ex-dividend in the next four days. Typically, the ex-dividend date is one business day before the record date which is the date on which a company determines the shareholders eligible to receive a dividend. The ex-dividend date is of consequence because whenever a stock is bought or sold, the trade takes at least two business day to settle. Accordingly, Victory Capital Holdings investors that purchase the stock on or after the 8th of March will not receive the dividend, which will be paid on the 25th of March.

The company's next dividend payment will be US$0.335 per share, and in the last 12 months, the company paid a total of US$1.34 per share. Based on the last year's worth of payments, Victory Capital Holdings stock has a trailing yield of around 3.5% on the current share price of US$38.55. Dividends are an important source of income to many shareholders, but the health of the business is crucial to maintaining those dividends. As a result, readers should always check whether Victory Capital Holdings has been able to grow its dividends, or if the dividend might be cut.

Check out our latest analysis for Victory Capital Holdings

If a company pays out more in dividends than it earned, then the dividend might become unsustainable - hardly an ideal situation. Fortunately Victory Capital Holdings's payout ratio is modest, at just 40% of profit.

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. Investors love dividends, so if earnings fall and the dividend is reduced, expect a stock to be sold off heavily at the same time. It's encouraging to see Victory Capital Holdings has grown its earnings rapidly, up 28% a year for the past five years.

The main way most investors will assess a company's dividend prospects is by checking the historical rate of dividend growth. In the last five years, Victory Capital Holdings has lifted its dividend by approximately 46% a year on average. It's exciting to see that both earnings and dividends per share have grown rapidly over the past few years.