FTSE 250 High -efficient polymer manufacturer Victrex (LSE: VCT) last year paid a dividend of 59.56 pence. This generates 8.4% of the current share price of 7.10 £. However, the average FTSE 250 performance is 3.4%, while FTSE 100Is 3.6%.

Analysts predict that the dividend will remain unchanged this year, before it drops slightly to 59.3 pens in 2026. In 2027 it is expected that it will raise again – to 60.6 pence.

Based on the current price of shares, these payments would give the appropriate dividend profitability of 8.4% this year and the next and 8.5% in 2027.

How much can you get passive income?

The average amount of savings in the UK in the amount of 11,000 GBP would buy 1549 shares in Victrex. With current efficiency, 8.4% would generate 924 pounds in first -year dividends. With the same average performance in 10 years it would raise to 9 240 GBP and after 30 years to 27 720 GBP.

However, the operate of standard investment practice of dividend would significantly raise these returns.

By doing this with the same average capacity of 8.5%, dividends would be £ 14,406, not £ 90, after 10 years. After 30 years on the same basis, they will raise to $ 124 520, not £ 27,720!

Including an initial investment worth 11,000 GBP and holding would be worth 135 520 GBP. And this would give an annual passive income from dividends of $ 11,384.

What does the company look like?

The raise in profits ultimately drives the price of shares and dividends of each company.

The risk of Victrex here remains the implementation of the Chinese Public Program (VBP) for medical materials. Therefore, government drugs and equipment via offers to ensure the lowest prices.

The effect of this was observable in the commercial update of July 8 Q3. The overall sales volume increased by 8% year -on -year, driven by energy and industry, and sustainable solutions (supporting carbon dioxide reduction).

However, the average sales prices of their products dropped by 11%, driven by the medical reserve department. This caused a 3% decrease in revenues to 71.5 million GBP during this period.

Considering the ongoing Chinese VBP initiative, Victrex must raise the number to raise earnings from the medical resources department. To say this, the company stated in an update that it was progressing in scaling of a novel Chinese production plant.

In the current situation, from now to the end of 2027, analysts forecast the average annual profit rate rate of 22.3%.

Potential profit also in the price of shares?

This profile of earnings is reflected in the analysis of the discounted cash flows for Victrex, which in my opinion is the optimal method of valuation.

It determines where the price of each company should be, based on cash flow forecasts for basic activities.

DCF for Victrex shows that its shares are underestimated by 54% at the current price of £ 7.10. Therefore, their fair value is £ 15.43.

Will I buy shares?

I believe that mighty prospects for increasing profits over time will raise the price of shares much higher. It seems to me that he will do the same because of its dividends.

I already have a carefully compiled portfolio with high payments paying dividends with which I am cheerful. However, I added Victrex to my observation list if any of these actions were worse in a lasting period.