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We Wouldn't Be Too Quick To Buy Fonix Mobile plc (LON:FNX) Before It Goes Ex-Dividend

It looks like Fonix Mobile plc ( LON:FNX ) is about to go ex-dividend in the next four days. The ex-dividend date occurs one day before the record date which is the day on which shareholders need to be on the company's books in order to receive a dividend. The ex-dividend date is of consequence because whenever a stock is bought or sold, the trade takes at least two business day to settle. In other words, investors can purchase Fonix Mobile's shares before the 21st of March in order to be eligible for the dividend, which will be paid on the 2nd of April.

The company's next dividend payment will be UK£0.026 per share, on the back of last year when the company paid a total of UK£0.075 to shareholders. Last year's total dividend payments show that Fonix Mobile has a trailing yield of 2.8% on the current share price of UK£2.675. 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 Fonix Mobile has been able to grow its dividends, or if the dividend might be cut.

View our latest analysis for Fonix Mobile

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. Its dividend payout ratio is 78% 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. It could become a concern if earnings started to decline.

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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 Fonix Mobile paid out over the last 12 months.

historic-dividend
AIM:FNX Historic Dividend March 16th 2024

If you're still considering Fonix Mobile as an investment, you'll find it beneficial to know what risks this stock is facing. In terms of investment risks,  we've identified 1 warning sign with Fonix Mobile and understanding them should be part of your investment process.

If you're in the market for strong dividend payers, we recommend checking our selection of top dividend stocks.

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.