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Regular readers will know that we love our dividends at Simply Wall St, which is why it's exciting to see AS Latvijas Juras medicinas centrs (MUN:UOM) is about to trade ex-dividend in the next four days. The ex-dividend date is one business day 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. 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. Therefore, if you purchase AS Latvijas Juras medicinas centrs' shares on or after the 29th of November, you won't be eligible to receive the dividend, when it is paid on the 1st of December.
The company's upcoming dividend is €0.10 a share, following on from the last 12 months, when the company distributed a total of €0.10 per share to shareholders. Calculating the last year's worth of payments shows that AS Latvijas Juras medicinas centrs has a trailing yield of 0.9% on the current share price of €10.7. We love seeing companies pay a dividend, but it's also important to be sure that laying the golden eggs isn't going to kill our golden goose! That's why we should always check whether the dividend payments appear sustainable, and if the company is growing.
See our latest analysis for AS Latvijas Juras medicinas centrs
Dividends are typically paid out of company income, so if a company pays out more than it earned, its dividend is usually at a higher risk of being cut. AS Latvijas Juras medicinas centrs distributed an unsustainably high 130% of its profit as dividends to shareholders last year. Without extenuating circumstances, we'd consider the dividend at risk of a cut. Yet cash flows are even more important than profits for assessing a dividend, so we need to see if the company generated enough cash to pay its distribution.
It's disappointing to see that the dividend was not covered by profits, but cash is more important from a dividend sustainability perspective, and AS Latvijas Juras medicinas centrs fortunately did generate enough cash to fund its dividend. If executives were to continue paying more in dividends than the company reported in profits, we'd view this as a warning sign. Extraordinarily few companies are capable of persistently paying a dividend that is greater than their profits.
Have Earnings And Dividends Been Growing?
Companies with falling earnings are riskier for dividend shareholders. If business enters a downturn and the dividend is cut, the company could see its value fall precipitously. AS Latvijas Juras medicinas centrs's earnings have collapsed faster than Wile E Coyote's schemes to trap the Road Runner; down a tremendous 34% a year over the past five years.