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Some investors rely on dividends for growing their wealth, and if you're one of those dividend sleuths, you might be intrigued to know that Marlin Global Limited (NZSE:MLN) is about to go ex-dividend in just 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. In other words, investors can purchase Marlin Global's shares before the 5th of June in order to be eligible for the dividend, which will be paid on the 27th of June.
The company's upcoming dividend is NZ$0.0208 a share, following on from the last 12 months, when the company distributed a total of NZ$0.071 per share to shareholders. Based on the last year's worth of payments, Marlin Global has a trailing yield of 7.1% on the current stock price of NZ$1.00. Dividends are an important source of income to many shareholders, but the health of the business is crucial to maintaining those dividends. As a result, readers should always check whether Marlin Global has been able to grow its dividends, or if the dividend might be cut.
See our latest analysis for Marlin Global
If a company pays out more in dividends than it earned, then the dividend might become unsustainable - hardly an ideal situation. Fortunately Marlin Global's payout ratio is modest, at just 49% of profit.
When a company paid out less in dividends than it earned in profit, this generally suggests its dividend is affordable. The lower the % of its profit that it pays out, the greater the margin of safety for the dividend if the business enters a downturn.
Click here to see how much of its profit Marlin Global paid out over the last 12 months.
Have Earnings And Dividends Been Growing?
Companies that aren't growing their earnings can still be valuable, but it is even more important to assess the sustainability of the dividend if it looks like the company will struggle to grow. If earnings fall far enough, the company could be forced to cut its dividend. With that in mind, we're not enthused to see that Marlin Global's earnings per share have remained effectively flat over the past five years. Better than seeing them fall off a cliff, for sure, but the best dividend stocks grow their earnings meaningfully over the long run.
The main way most investors will assess a company's dividend prospects is by checking the historical rate of dividend growth. Marlin Global's dividend payments are broadly unchanged compared to where they were 10 years ago.