Yahoo Finance Be Sure To Check Out The Weir Group PLC (LON:WEIR) Before It Goes Ex-Dividend
The Weir Group PLC (LON:WEIR) is about to trade ex-dividend in the next three days. 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 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. This means that investors who purchase Weir Group's shares on or after the 7th of October will not receive the dividend, which will be paid on the 5th of November.
The company's upcoming dividend is UK£0.12 a share, following on from the last 12 months, when the company distributed a total of UK£0.23 per share to shareholders. Last year's total dividend payments show that Weir Group has a trailing yield of 1.4% on the current share price of £16.355. If you buy this business for its dividend, you should have an idea of whether Weir Group's dividend is reliable and sustainable. We need to see whether the dividend is covered by earnings and if it's growing.
View our latest analysis for Weir 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. Weir Group has a low and conservative payout ratio of just 19% of its income after tax.
Click here to see the company's payout ratio, plus analyst estimates of its future dividends.
Have Earnings And Dividends Been Growing?
Stocks in companies that generate sustainable earnings growth often make the best dividend prospects, as it is easier to lift the dividend when earnings are rising. If earnings fall far enough, the company could be forced to cut its dividend. It's encouraging to see Weir Group has grown its earnings rapidly, up 24% a year for the past five years. Weir Group looks like a real growth company, with earnings per share growing at a cracking pace and the company reinvesting most of its profits in the business.
The main way most investors will assess a company's dividend prospects is by checking the historical rate of dividend growth. Weir Group has seen its dividend decline 1.6% per annum on average over the past 10 years, which is not great to see.
The Bottom Line
Is Weir Group worth buying for its dividend? Companies like Weir Group that are growing rapidly and paying out a low fraction of earnings, are usually reinvesting heavily in their business. This is one of the most attractive investment combinations under this analysis, as it can create substantial value for investors over the long run. In summary, Weir Group appears to have some promise as a dividend stock, and we'd suggest taking a closer look at it.
In light of that, while Weir Group has an appealing dividend, it's worth knowing the risks involved with this stock. For example, Weir Group has 2 warning signs (and 1 which is significant) we think you should know about.
We wouldn't recommend just buying the first dividend stock you see, though. Here's a list of interesting dividend stocks with a greater than 2% yield and an upcoming dividend.
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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