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Hansard Global plc (LON:HSD) is about to trade ex-dividend in the next 3 days. The ex-dividend date is commonly two business days before the record date, which is the cut-off date for shareholders to be present on the company's books to be eligible for a dividend payment. The ex-dividend date is of consequence because whenever a stock is bought or sold, the trade can take two business days or more to settle. Thus, you can purchase Hansard Global's shares before the 13th of March in order to receive the dividend, which the company will pay on the 24th of April.
The company's upcoming dividend is UK£0.018 a share, following on from the last 12 months, when the company distributed a total of UK£0.044 per share to shareholders. Last year's total dividend payments show that Hansard Global has a trailing yield of 9.0% on the current share price of UK£0.492. Dividends are an important source of income to many shareholders, but the health of the business is crucial to maintaining those dividends. So we need to investigate whether Hansard Global can afford its dividend, and if the dividend could grow.
See our latest analysis for Hansard Global
Dividends are typically paid from company earnings. If a company pays more in dividends than it earned in profit, then the dividend could be unsustainable. Hansard Global distributed an unsustainably high 118% of its profit as dividends to shareholders last year. Without more sustainable payment behaviour, the dividend looks precarious.
When the dividend payout ratio is high, as it is in this case, the dividend is usually at greater risk of being cut in the future.
Click here to see how much of its profit Hansard Global paid out over the last 12 months.
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. If business enters a downturn and the dividend is cut, the company could see its value fall precipitously. This is why it's a relief to see Hansard Global earnings per share are up 2.7% per annum over the last five years.
The main way most investors will assess a company's dividend prospects is by checking the historical rate of dividend growth. Hansard Global's dividend payments per share have declined at 6.2% per year on average over the past 10 years, which is uninspiring. Hansard Global 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.