Readers hoping to buy Nuvei Corporation (TSE:NVEI) for its dividend will need to make their move shortly, as the stock is about to trade ex-dividend. 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. The ex-dividend date is important as the process of settlement involves two full business days. So if you miss that date, you would not show up on the company's books on the record date. Meaning, you will need to purchase Nuvei's shares before the 17th of November to receive the dividend, which will be paid on the 7th of December.
The upcoming dividend for Nuvei is US$0.10 per share. Dividends are a major contributor to investment returns for long term holders, but only if the dividend continues to be paid. We need to see whether the dividend is covered by earnings and if it's growing.
Check out our latest analysis for Nuvei
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. Nuvei is paying out an acceptable 70% of its profit, a common payout level among most companies.
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. Investors love dividends, so if earnings fall and the dividend is reduced, expect a stock to be sold off heavily at the same time. Nuvei was unprofitable last year, but at least the general trend suggests its earnings have been improving over the past five years. Even so, an unprofitable company whose business does not quickly recover is usually not a good candidate for dividend investors.
This is Nuvei's first year of paying a dividend, so it doesn't have much of a history yet to compare to.
We update our analysis on Nuvei every 24 hours, so you can always get the latest insights on its financial health, here.
The Bottom Line
Is Nuvei an attractive dividend stock, or better left on the shelf? We're a bit uncomfortable with it paying a dividend while being loss-making. Overall, Nuvei looks like a promising dividend stock in this analysis, and we think it would be worth investigating further.
While it's tempting to invest in Nuvei for the dividends alone, you should always be mindful of the risks involved. In terms of investment risks, we've identified 1 warning sign with Nuvei and understanding them should be part of your investment process.