HC Surgical Specialists Limited (Catalist:1B1) stock is about to trade ex-dividend in 3 days. Typically, the ex-dividend date is one business day before the record date which is the date on which a company determines the shareholders eligible to receive a dividend. The ex-dividend date is of consequence because whenever a stock is bought or sold, the trade takes at least two business day to settle. This means that investors who purchase HC Surgical Specialists' shares on or after the 28th of February will not receive the dividend, which will be paid on the 13th of March.
The company's upcoming dividend is S$0.008 a share, following on from the last 12 months, when the company distributed a total of S$0.015 per share to shareholders. Based on the last year's worth of payments, HC Surgical Specialists stock has a trailing yield of around 5.0% on the current share price of S$0.30. 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! As a result, readers should always check whether HC Surgical Specialists has been able to grow its dividends, or if the dividend might be cut.
See our latest analysis for HC Surgical Specialists
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. HC Surgical Specialists is paying out an acceptable 61% of its profit, a common payout level among most companies. That said, even highly profitable companies sometimes might not generate enough cash to pay the dividend, which is why we should always check if the dividend is covered by cash flow. Fortunately, it paid out only 30% of its free cash flow in the past year.
It's positive to see that HC Surgical Specialists's dividend is covered by both profits and cash flow, since this is generally a sign that the dividend is sustainable, and a lower payout ratio usually suggests a greater margin of safety before the dividend gets cut.
Click here to see how much of its profit HC Surgical Specialists paid out over the last 12 months.
Have Earnings And Dividends Been Growing?
Companies with falling earnings are riskier for dividend shareholders. If earnings decline and the company is forced to cut its dividend, investors could watch the value of their investment go up in smoke. HC Surgical Specialists's earnings per share have fallen at approximately 13% a year over the previous five years. Such a sharp decline casts doubt on the future sustainability of the dividend.