Yahoo Finance Income Investors Should Know That Kitwave Group plc (LON:KITW) Goes Ex-Dividend Soon
Readers hoping to buy Kitwave Group plc (LON:KITW) for its dividend will need to make their move shortly, as the stock is about to trade ex-dividend. The ex-dividend date is one business day before the record date, which is the cut-off date for shareholders to be present on the company's books to be eligible for a dividend payment. The ex-dividend date is important as the process of settlement involves two full business days. So if you miss that date, you would not show up on the company's books on the record date. Accordingly, Kitwave Group investors that purchase the stock on or after the 4th of April will not receive the dividend, which will be paid on the 26th of April.
The company's next dividend payment will be UK£0.0745 per share. Last year, in total, the company distributed UK£0.10 to shareholders. Based on the last year's worth of payments, Kitwave Group has a trailing yield of 3.0% on the current stock price of UK£3.71. 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! As a result, readers should always check whether Kitwave Group has been able to grow its dividends, or if the dividend might be cut.
See our latest analysis for Kitwave Group
Dividends are typically paid from company earnings. If a company pays more in dividends than it earned in profit, then the dividend could be unsustainable. Fortunately Kitwave Group's payout ratio is modest, at just 41% of profit. A useful secondary check can be to evaluate whether Kitwave Group generated enough free cash flow to afford its dividend. Thankfully its dividend payments took up just 28% of the free cash flow it generated, which is a comfortable payout ratio.
It's encouraging to see that the dividend is covered by both profit and cash flow. This generally suggests the dividend is sustainable, as long as earnings don't drop precipitously.
Click here to see the company's payout ratio, plus analyst estimates of its future dividends.
Have Earnings And Dividends Been Growing?
When earnings decline, dividend companies become much harder to analyse and own safely. If earnings fall far enough, the company could be forced to cut its dividend. Kitwave Group's earnings per share have plummeted approximately 60% a year over the previous five years.
Many investors will assess a company's dividend performance by evaluating how much the dividend payments have changed over time. In the past three years, Kitwave Group has increased its dividend at approximately 36% a year on average.
Final Takeaway
From a dividend perspective, should investors buy or avoid Kitwave Group? Kitwave Group has comfortably low cash and profit payout ratios, which may mean the dividend is sustainable even in the face of a sharp decline in earnings per share. Still, we consider declining earnings to be a warning sign. All things considered, we are not particularly enthused about Kitwave Group from a dividend perspective.
With that in mind, a critical part of thorough stock research is being aware of any risks that stock currently faces. Case in point: We've spotted 1 warning sign for Kitwave Group you should be aware of.
A common investing mistake is buying the first interesting stock you see. Here you can find a full list of high-yield 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.
