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U.S. Global Investors, Inc. (NASDAQ:GROW) is about to trade ex-dividend in the next four 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. 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. Therefore, if you purchase U.S. Global Investors' shares on or after the 8th of November, you won't be eligible to receive the dividend, when it is paid on the 25th of November.
The company's next dividend payment will be US$0.0075 per share, and in the last 12 months, the company paid a total of US$0.09 per share. Based on the last year's worth of payments, U.S. Global Investors has a trailing yield of 3.6% on the current stock price of US$2.48. We love seeing companies pay a dividend, but it's also important to be sure that laying the golden eggs isn't going to kill our golden goose! We need to see whether the dividend is covered by earnings and if it's growing.
Check out our latest analysis for U.S. Global Investors
If a company pays out more in dividends than it earned, then the dividend might become unsustainable - hardly an ideal situation. Last year, U.S. Global Investors paid out 96% of its income as dividends, which is above a level that we're comfortable with, especially if the company needs to reinvest in its business.
Generally, the higher a company's payout ratio, the more the dividend is at risk of being reduced.
Click here to see how much of its profit U.S. Global Investors paid out over the last 12 months.
Have Earnings And Dividends Been Growing?
Stocks with flat earnings can still be attractive dividend payers, but it is important to be more conservative with your approach and demand a greater margin for safety when it comes to dividend sustainability. Investors love dividends, so if earnings fall and the dividend is reduced, expect a stock to be sold off heavily at the same time. That explains why we're not overly excited about U.S. Global Investors's flat earnings over the past five years. We'd take that over an earnings decline any day, but in the long run, the best dividend stocks all grow their earnings per share.
Many investors will assess a company's dividend performance by evaluating how much the dividend payments have changed over time. U.S. Global Investors has delivered 4.1% dividend growth per year on average over the past 10 years.