Capturing the Richards Packaging Dividend: A Secure 4.8% Yield with Room to Grow

The clock is ticking for investors seeking a reliable income stream. Richards Packaging Income Fund (TSE:RPI.UN) offers a compelling opportunity to lock in a 4.8% trailing dividend yield by purchasing shares before its May 30, 2025 ex-dividend date. With a history of consistent payouts and a payout ratio now among the lowest in its sector, RPI.UN stands out as a conservative yet growth-oriented play in today's volatile market. Here's why this fund deserves a place in your portfolio—and why waiting past May 30 could mean missing out.

The Immediate Opportunity: Secure the June 13 Dividend

Shares purchased before market close on May 30, 2025, will entitle investors to the June 13 dividend payment of C$0.11 per share, part of RPI.UN's monthly distribution schedule. This fund has maintained this payout rate since early 2024, demonstrating remarkable stability. For context, the annualized dividend is C$1.32 per share, and at the current price of C$26.83 per unit, this translates to a 4.8% yield—well above the S&P/TSX Composite Index's average dividend yield of 2.6%.

Why the Payout Ratio Matters: Safety in Numbers

Critically, RPI.UN's conservative payout structure ensures this dividend is sustainable. Recent financials reveal a 39% payout ratio in Q1 2025, calculated as distributions divided by distributable cash flow. This is a dramatic improvement from the 84% payout ratio of the same period in 杧24. The reduction reflects stronger free cash flow generation and disciplined financial management.

• Q1 2025 free cash flow: C$6.0 million (up from C$5.6 million in 2024).
• Distributable cash flow per unit: C$0.86 (vs. C$0.82 in 2024).

A payout ratio below 50% is a red flag for overextension—RPI.UN's 39% leaves ample room to weather earnings volatility or reinvest in growth. This contrasts sharply with peers averaging 55–65% payout ratios, underscoring RPI.UN's conservative stance.

Earnings Stability: A Foundation for Long-Term Growth

The fund's recent earnings further bolster confidence. Despite macroeconomic headwinds, RPI.UN's Q1 2025 distributable cash flow rose by 4% year-over-year, driven by cost discipline and strategic acquisitions. Management highlighted healthcare and dental market expansions as growth drivers, while a leverage ratio of 0.3x (well below covenant limits) ensures financial flexibility.

Even more reassuring: the fund's payout has never been cut since its 2023 restructuring, which saw a temporary spike to C$0.36 per share before reverting to the sustainable C$0.11 monthly rate. This history suggests RPI.UN prioritizes unitholder stability over aggressive growth bets.

The Case for Immediate Action: Time is Running Out

For income-focused investors, the May 30 ex-dividend deadline creates urgency. Missing this date means forgoing the June 13 payout. But the opportunity extends beyond a single dividend:

1. Yield Advantage: At 4.8%, RPI.UN's yield outperforms most fixed-income alternatives.
2. Payout Safety: A 39% payout ratio and rising free cash flow reduce cut risk.
3. Consistency: 12 consecutive months of C$0.11 distributions, with no cuts in sight.
4. Growth Potential: Management's focus on high-margin healthcare packaging and a conservative balance sheet suggest room to raise dividends in the future.

Final Verdict: A Secure Income Play with Growth Legs

Richards Packaging Income Fund is a rare blend of yield, safety, and strategic growth potential. With its ex-dividend date approaching, now is the time to act. Investors who buy before May 30 will secure a 4.8% yield backed by a payout ratio that leaves little to fear—even in a slowing economy. For those prioritizing steady income without excessive risk, RPI.UN is a no-brainer.

Don't wait—act before May 30 to lock in this dividend.

Investors should always conduct their own research and consider tax implications. Past performance does not guarantee future results.