Yahoo Finance There's A Lot To Like About Golden Entertainment's (NASDAQ:GDEN) Upcoming US$0.25 Dividend
It looks like Golden Entertainment, Inc. (NASDAQ:GDEN) is about to go ex-dividend in the next 4 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. It is important to be aware of the ex-dividend date because any trade on the stock needs to have been settled on or before the record date. In other words, investors can purchase Golden Entertainment's shares before the 14th of June in order to be eligible for the dividend, which will be paid on the 2nd of July.
The company's next dividend payment will be US$0.25 per share. 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 Golden Entertainment has been able to grow its dividends, or if the dividend might be cut.
Check out our latest analysis for Golden Entertainment
If a company pays out more in dividends than it earned, then the dividend might become unsustainable - hardly an ideal situation. Golden Entertainment paid out just 2.5% of its profit last year, which we think is conservatively low and leaves plenty of margin for unexpected circumstances. Yet cash flow is typically more important than profit for assessing dividend sustainability, so we should always check if the company generated enough cash to afford its dividend. The good news is it paid out just 0.2% of its free cash flow in the last year.
It's positive to see that Golden Entertainment's dividend is covered by both profits and cash flow, since this is generally a sign that the dividend is sustainable, and a lower payout ratio usually suggests a greater margin of safety before the dividend gets cut.
Click here to see the company's payout ratio, plus analyst estimates of its future dividends.
Have Earnings And Dividends Been Growing?
Businesses with strong growth prospects usually make the best dividend payers, because it's easier to grow dividends when earnings per share are improving. 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 encouraging to see Golden Entertainment has grown its earnings rapidly, up 58% a year for the past five years. With earnings per share growing rapidly and the company sensibly reinvesting almost all of its profits within the business, Golden Entertainment looks like a promising growth company.
This is Golden Entertainment's first year of paying a regular dividend, so it doesn't have much of a history yet to compare to.
To Sum It Up
Has Golden Entertainment got what it takes to maintain its dividend payments? Golden Entertainment has been growing earnings at a rapid rate, and has a conservatively low payout ratio, implying that it is reinvesting heavily in its business; a sterling combination. Golden Entertainment looks solid on this analysis overall, and we'd definitely consider investigating it more closely.
In light of that, while Golden Entertainment has an appealing dividend, it's worth knowing the risks involved with this stock. Our analysis shows 4 warning signs for Golden Entertainment that we strongly recommend you have a look at before investing in the company.
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.
