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Regular readers will know that we love our dividends at Simply Wall St, which is why it's exciting to see Olympia Financial Group Inc. (TSE:OLY) is about to trade ex-dividend in the next 4 days. The ex-dividend date is usually set to be one business day before the record date which is the cut-off date on which you must be present on the company's books as a shareholder in order to receive the dividend. It is important to be aware of the ex-dividend date because any trade on the stock needs to have been settled on or before the record date. Accordingly, Olympia Financial Group investors that purchase the stock on or after the 20th of November will not receive the dividend, which will be paid on the 30th of November.
The company's next dividend payment will be CA$0.60 per share, on the back of last year when the company paid a total of CA$7.20 to shareholders. Calculating the last year's worth of payments shows that Olympia Financial Group has a trailing yield of 8.4% on the current share price of CA$86. Dividends are an important source of income to many shareholders, but the health of the business is crucial to maintaining those dividends. So we need to check whether the dividend payments are covered, and if earnings are growing.
Check out our latest analysis for Olympia Financial Group
If a company pays out more in dividends than it earned, then the dividend might become unsustainable - hardly an ideal situation. Olympia Financial Group paid out a comfortable 33% of its profit last year.
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 Olympia Financial Group paid out over the last 12 months.
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 business enters a downturn and the dividend is cut, the company could see its value fall precipitously. It's encouraging to see Olympia Financial Group has grown its earnings rapidly, up 26% a year for the past five years.
Another key way to measure a company's dividend prospects is by measuring its historical rate of dividend growth. Olympia Financial Group has delivered an average of 9.9% 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.