LifeWorks Inc. (TSE:LWRK) is about to trade ex-dividend in the next 4 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. Thus, you can purchase LifeWorks' shares before the 29th of November in order to receive the dividend, which the company will pay on the 15th of December.
The company's upcoming dividend is CA$0.065 a share, following on from the last 12 months, when the company distributed a total of CA$0.78 per share to shareholders. Calculating the last year's worth of payments shows that LifeWorks has a trailing yield of 3.0% on the current share price of CA$26.41. If you buy this business for its dividend, you should have an idea of whether LifeWorks's dividend is reliable and sustainable. As a result, readers should always check whether LifeWorks has been able to grow its dividends, or if the dividend might be cut.
See our latest analysis for LifeWorks
Dividends are typically paid out of company income, so if a company pays out more than it earned, its dividend is usually at a higher risk of being cut. LifeWorks's dividend is not well covered by earnings, as the company lost money last year. This is not a sustainable state of affairs, so it would be worth investigating if earnings are expected to recover. Given that the company reported a loss last year, we now need to see if it generated enough free cash flow to fund the dividend. If LifeWorks didn't generate enough cash to pay the dividend, then it must have either paid from cash in the bank or by borrowing money, neither of which is sustainable in the long term. Dividends consumed 72% of the company's free cash flow last year, which is within a normal range for most dividend-paying organisations.
Click here to see the company's payout ratio, plus analyst estimates of its future dividends.
Have Earnings And Dividends Been Growing?
Companies with falling earnings are riskier for dividend shareholders. Investors love dividends, so if earnings fall and the dividend is reduced, expect a stock to be sold off heavily at the same time. LifeWorks reported a loss last year, and the general trend suggests its earnings have also been declining in recent years, making us wonder if the dividend is at risk.
Many investors will assess a company's dividend performance by evaluating how much the dividend payments have changed over time. LifeWorks has seen its dividend decline 1.9% per annum on average over the past 10 years, which is not great to see.