Appreciate Group plc (LON:APP) stock is about to trade ex-dividend in 3 days. Typically, the ex-dividend date is one business day before the record date which is the date on which a company determines the shareholders eligible to receive a dividend. The ex-dividend date is an important date to be aware of as any purchase of the stock made on or after this date might mean a late settlement that doesn't show on the record date. This means that investors who purchase Appreciate Group's shares on or after the 25th of August will not receive the dividend, which will be paid on the 3rd of October.
The company's next dividend payment will be UK£0.012 per share, on the back of last year when the company paid a total of UK£0.024 to shareholders. Based on the last year's worth of payments, Appreciate Group stock has a trailing yield of around 7.5% on the current share price of £0.318. If you buy this business for its dividend, you should have an idea of whether Appreciate Group's dividend is reliable and sustainable. So we need to check whether the dividend payments are covered, and if earnings are growing.
View our latest analysis for Appreciate 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. Its dividend payout ratio is 76% of profit, which means the company is paying out a majority of its earnings. The relatively limited profit reinvestment could slow the rate of future earnings growth. We'd be concerned if earnings began to decline.
Generally speaking, the lower a company's payout ratios, the more resilient its dividend usually is.
Click here to see the company's payout ratio, plus analyst estimates of its future dividends.
Have Earnings And Dividends Been Growing?
Businesses with shrinking earnings are tricky from a dividend perspective. If earnings fall far enough, the company could be forced to cut its dividend. Appreciate Group's earnings per share have fallen at approximately 15% a year over the previous five years. When earnings per share fall, the maximum amount of dividends that can be paid also falls.
Another key way to measure a company's dividend prospects is by measuring its historical rate of dividend growth. Since the start of our data, 10 years ago, Appreciate Group has lifted its dividend by approximately 1.8% a year on average.
The Bottom Line
Has Appreciate Group got what it takes to maintain its dividend payments? We're not overly enthused to see Appreciate Group's earnings in retreat at the same time as the company is paying out more than half of its earnings as dividends to shareholders. This is not an overtly appealing combination of characteristics, and we're just not that interested in this company's dividend.