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Lords Group Trading plc (LON:LORD) stock is about to trade ex-dividend in three 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 of consequence because whenever a stock is bought or sold, the trade takes at least two business day to settle. Meaning, you will need to purchase Lords Group Trading's shares before the 14th of September to receive the dividend, which will be paid on the 6th of October.
The company's next dividend payment will be UK£0.0067 per share. Last year, in total, the company distributed UK£0.02 to shareholders. Looking at the last 12 months of distributions, Lords Group Trading has a trailing yield of approximately 3.3% on its current stock price of £0.615. If you buy this business for its dividend, you should have an idea of whether Lords Group Trading's dividend is reliable and sustainable. As a result, readers should always check whether Lords Group Trading has been able to grow its dividends, or if the dividend might be cut.
View our latest analysis for Lords Group Trading
Dividends are typically paid from company earnings. If a company pays more in dividends than it earned in profit, then the dividend could be unsustainable. Lords Group Trading paid out a comfortable 36% of its profit last year. A useful secondary check can be to evaluate whether Lords Group Trading generated enough free cash flow to afford its dividend. It paid out 86% of its free cash flow as dividends, which is within usual limits but will limit the company's ability to lift the dividend if there's no growth.
It's positive to see that Lords Group Trading's dividend is covered by both profits and cash flow, since this is generally a sign that the dividend is sustainable, and a lower payout ratio usually suggests a greater margin of safety before the dividend gets cut.
Click here to see the company's payout ratio, plus analyst estimates of its future dividends.
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 fall far enough, the company could be forced to cut its dividend. It's encouraging to see Lords Group Trading has grown its earnings rapidly, up 36% a year for the past five years.
Many investors will assess a company's dividend performance by evaluating how much the dividend payments have changed over time. Lords Group Trading has delivered an average of 26% per year annual increase in its dividend, based on the past two years of dividend payments. It's great to see earnings per share growing rapidly over several years, and dividends per share growing right along with it.