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Readers hoping to buy BioPharma Credit PLC (LON:BPCR) for its dividend will need to make their move shortly, as the stock is about to trade ex-dividend. The ex-dividend date is usually set to be one business day before the record date which is the cut-off date on which you must be present on the company's books as a shareholder in order to receive the dividend. It is important to be aware of the ex-dividend date because any trade on the stock needs to have been settled on or before the record date. In other words, investors can purchase BioPharma Credit's shares before the 25th of August in order to be eligible for the dividend, which will be paid on the 23rd of September.
The company's next dividend payment will be US$0.018 per share, and in the last 12 months, the company paid a total of US$0.073 per share. Based on the last year's worth of payments, BioPharma Credit stock has a trailing yield of around 7.2% on the current share price of $0.968. Dividends are an important source of income to many shareholders, but the health of the business is crucial to maintaining those dividends. That's why we should always check whether the dividend payments appear sustainable, and if the company is growing.
Check out our latest analysis for BioPharma Credit
If a company pays out more in dividends than it earned, then the dividend might become unsustainable - hardly an ideal situation. BioPharma Credit distributed an unsustainably high 113% of its profit as dividends to shareholders last year. Without extenuating circumstances, we'd consider the dividend at risk of a cut.
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 BioPharma Credit 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. Fortunately for readers, BioPharma Credit's earnings per share have been growing at 12% a year for the past five years.
Another key way to measure a company's dividend prospects is by measuring its historical rate of dividend growth. In the last five years, BioPharma Credit has lifted its dividend by approximately 12% a year on average. It's exciting to see that both earnings and dividends per share have grown rapidly over the past few years.