Yahoo Finance Income Investors Should Know That EJF Investments Limited (LON:EJFI) Goes Ex-Dividend Soon
EJF Investments Limited (LON:EJFI) stock is about to trade ex-dividend in two 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 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. Accordingly, EJF Investments investors that purchase the stock on or after the 3rd of August will not receive the dividend, which will be paid on the 31st of August.
The company's upcoming dividend is UK£0.027 a share, following on from the last 12 months, when the company distributed a total of UK£0.11 per share to shareholders. Looking at the last 12 months of distributions, EJF Investments has a trailing yield of approximately 9.9% on its current stock price of £1.08. Dividends are an important source of income to many shareholders, but the health of the business is crucial to maintaining those dividends. As a result, readers should always check whether EJF Investments has been able to grow its dividends, or if the dividend might be cut.
See our latest analysis for EJF Investments
If a company pays out more in dividends than it earned, then the dividend might become unsustainable - hardly an ideal situation. Fortunately EJF Investments's payout ratio is modest, at just 46% of profit.
Companies that pay out less in dividends than they earn in profits generally have more sustainable dividends. The lower the payout ratio, the more wiggle room the business has before it could be forced to cut the dividend.
Click here to see how much of its profit EJF Investments paid out over the last 12 months.
Have Earnings And Dividends Been Growing?
Companies with falling earnings are riskier for dividend shareholders. If earnings decline and the company is forced to cut its dividend, investors could watch the value of their investment go up in smoke. That's why it's not ideal to see EJF Investments's earnings per share have been shrinking at 3.0% a year over the previous five years.
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, six years ago, EJF Investments has lifted its dividend by approximately 1.8% a year on average.
To Sum It Up
Should investors buy EJF Investments for the upcoming dividend? EJF Investments's earnings per share are down over the past five years, although it has the cushion of a low payout ratio, which would suggest a cut to the dividend is relatively unlikely. At best we would put it on a watch-list to see if business conditions improve, as it doesn't look like a clear opportunity right now.
If you want to look further into EJF Investments, it's worth knowing the risks this business faces. We've identified 3 warning signs with EJF Investments (at least 1 which can't be ignored), and understanding these should be part of your investment process.
Generally, we wouldn't recommend just buying the first dividend stock you see. Here's a curated list of interesting stocks that are strong dividend payers.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.
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