Fiducian Group Ltd (ASX:FID) stock is about to trade ex-dividend in 3 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 important because any transaction on a stock needs to have been settled before the record date in order to be eligible for a dividend. Meaning, you will need to purchase Fiducian Group's shares before the 24th of February to receive the dividend, which will be paid on the 13th of March.
The company's next dividend payment will be AU$0.12 per share, and in the last 12 months, the company paid a total of AU$0.30 per share. Calculating the last year's worth of payments shows that Fiducian Group has a trailing yield of 4.7% on the current share price of A$6.4. If you buy this business for its dividend, you should have an idea of whether Fiducian Group's dividend is reliable and sustainable. As a result, readers should always check whether Fiducian Group has been able to grow its dividends, or if the dividend might be cut.
View our latest analysis for Fiducian Group
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. Fiducian Group is paying out an acceptable 70% of its profit, a common payout level among most companies.
Companies that pay out less in dividends than they earn in profits generally have more sustainable dividends. The lower the payout ratio, the more wiggle room the business has before it could be forced to cut the dividend.
Click here to see how much of its profit Fiducian Group paid out over the last 12 months.
Have Earnings And Dividends Been Growing?
Stocks in companies that generate sustainable earnings growth often make the best dividend prospects, as it is easier to lift the dividend when earnings are rising. If earnings decline and the company is forced to cut its dividend, investors could watch the value of their investment go up in smoke. This is why it's a relief to see Fiducian Group earnings per share are up 9.9% per annum over the last five years.
Another key way to measure a company's dividend prospects is by measuring its historical rate of dividend growth. Fiducian Group has delivered an average of 15% 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.