It looks like Microequities Asset Management Group Limited (ASX:MAM) is about to go ex-dividend in the next four 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 important because any transaction on a stock needs to have been settled before the record date in order to be eligible for a dividend. Thus, you can purchase Microequities Asset Management Group’s shares before the 22nd of February in order to receive the dividend, which the company will pay on the 8th of March.
The company’s next dividend payment will be AU$0.018 per share, and in the last 12 months, the company paid a total of AU$0.03 per share. Based on the last year’s worth of payments, Microequities Asset Management Group stock has a trailing yield of around 4.8% on the current share price of AU$0.625. Dividends are a major contributor to investment returns for long term holders, but only if the dividend continues to be paid. As a result, readers should always check whether Microequities Asset Management Group has been able to grow its dividends, or if the dividend might be cut.
Check out our latest analysis for Microequities Asset Management Group
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. Its dividend payout ratio is 75% 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.
Have Earnings And Dividends Been Growing?
Companies that aren’t growing their earnings can still be valuable, but it is even more important to assess the sustainability of the dividend if it looks like the company will struggle to grow. If earnings decline and the company is forced to cut its dividend, investors could watch the value of their investment go up in smoke. It’s not encouraging to see that Microequities Asset Management Group’s earnings are effectively flat over the past five years. Better than seeing them fall off a cliff, for sure, but the best dividend stocks grow their earnings meaningfully over the long run.
Another key way to measure a company’s dividend prospects is by measuring its historical rate of dividend growth. Microequities Asset Management Group has delivered an average of 8.4% per year annual increase in its dividend, based on the past five years of dividend payments.
The Bottom Line
Is Microequities Asset Management Group worth buying for its dividend? Microequities Asset Management Group has been struggling to generate growth while also paying out more than half of its earnings to shareholders as dividends. It doesn’t appear an outstanding opportunity, but could be worth a closer look.
So if you want to do more digging on Microequities Asset Management Group, you’ll find it worthwhile knowing the risks that this stock faces. To help with this, we’ve discovered 2 warning signs for Microequities Asset Management Group that you should be aware of before investing in their shares.
If you’re in the market for strong dividend payers, we recommend checking our selection of top dividend stocks.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
