In This Article:
Great-West Lifeco Inc. (TSE:GWO) is about to trade ex-dividend in the next 4 days. The ex-dividend date is one business day before a company's record date, which is the date on which the company determines which shareholders are entitled to receive a dividend. The ex-dividend date is important because any transaction on a stock needs to have been settled before the record date in order to be eligible for a dividend. This means that investors who purchase Great-West Lifeco's shares on or after the 30th of August will not receive the dividend, which will be paid on the 27th of September.
The company's next dividend payment will be CA$0.555 per share, on the back of last year when the company paid a total of CA$2.22 to shareholders. Based on the last year's worth of payments, Great-West Lifeco stock has a trailing yield of around 5.1% on the current share price of CA$43.59. If you buy this business for its dividend, you should have an idea of whether Great-West Lifeco's dividend is reliable and sustainable. As a result, readers should always check whether Great-West Lifeco has been able to grow its dividends, or if the dividend might be cut.
Check out our latest analysis for Great-West Lifeco
Dividends are usually paid out of company profits, so if a company pays out more than it earned then its dividend is usually at greater risk of being cut. Great-West Lifeco paid out more than half (54%) of its earnings last year, which is a regular payout ratio for most companies.
Generally speaking, the lower a company's payout ratios, the more resilient its dividend usually is.
Click here to see the company's payout ratio, plus analyst estimates of its future dividends.
Have Earnings And Dividends Been Growing?
Businesses with strong growth prospects usually make the best dividend payers, because it's easier to grow dividends when earnings per share are improving. 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 Great-West Lifeco earnings per share are up 5.9% per annum over the last five years.
Many investors will assess a company's dividend performance by evaluating how much the dividend payments have changed over time. Great-West Lifeco has delivered an average of 6.1% per year annual increase in its dividend, based on the past 10 years of dividend payments. It's encouraging to see the company lifting dividends while earnings are growing, suggesting at least some corporate interest in rewarding shareholders.