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It looks like Microequities Asset Management Group Limited (ASX:MAM) is about to go ex-dividend in the next 2 days. The ex-dividend date occurs one day before the record date which is the day on which shareholders need to be on the company's books in order 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. Therefore, if you purchase Microequities Asset Management Group's shares on or after the 21st of February, you won't be eligible to receive the dividend, when it is paid on the 7th of March.
The company's next dividend payment will be AU$0.019 per share, and in the last 12 months, the company paid a total of AU$0.038 per share. Based on the last year's worth of payments, Microequities Asset Management Group has a trailing yield of 6.2% on the current stock price of AU$0.61. If you buy this business for its dividend, you should have an idea of whether Microequities Asset Management Group's dividend is reliable and sustainable. So we need to check whether the dividend payments are covered, and if earnings are growing.
See our latest analysis for Microequities Asset Management Group
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. Microequities Asset Management Group paid out 65% of its earnings to investors last year, a normal payout level for most businesses.
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.
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 earnings decline and the company is forced to cut its dividend, investors could watch the value of their investment go up in smoke. That's why it's comforting to see Microequities Asset Management Group's earnings have been skyrocketing, up 24% per annum for the past five years.
The main way most investors will assess a company's dividend prospects is by checking the historical rate of dividend growth. Microequities Asset Management Group has delivered an average of 11% per year annual increase in its dividend, based on the past six years of dividend payments. Both per-share earnings and dividends have both been growing rapidly in recent times, which is great to see.