Yahoo Finance Read This Before Considering Alexander Forbes Group Holdings Limited (JSE:AFH) For Its Upcoming R00.90 Dividend
It looks like Alexander Forbes Group Holdings Limited (JSE:AFH) is about to go ex-dividend in the next three days. The ex-dividend date is usually set to be one business day before the record date which is the cut-off date on which you must be present on the company's books as a shareholder in order to receive the 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, Alexander Forbes Group Holdings investors that purchase the stock on or after the 17th of July will not receive the dividend, which will be paid on the 22nd of July.
The company's upcoming dividend is R00.90 a share, following on from the last 12 months, when the company distributed a total of R0.50 per share to shareholders. Calculating the last year's worth of payments shows that Alexander Forbes Group Holdings has a trailing yield of 6.8% on the current share price of R07.31. 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! So we need to check whether the dividend payments are covered, and if earnings are growing.
See our latest analysis for Alexander Forbes Group Holdings
Dividends are usually paid out of company profits, so if a company pays out more than it earned then its dividend is usually at greater risk of being cut. Last year Alexander Forbes Group Holdings paid out 110% of its profits as dividends to shareholders, suggesting the dividend is not well covered by earnings.
When a company pays out a dividend that is not well covered by profits, the dividend is generally seen as more vulnerable to being cut.
Click here to see how much of its profit Alexander Forbes Group Holdings paid out over the last 12 months.
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. For this reason, we're glad to see Alexander Forbes Group Holdings's earnings per share have risen 16% per annum over the last five years.
The main way most investors will assess a company's dividend prospects is by checking the historical rate of dividend growth. Alexander Forbes Group Holdings has delivered 17% dividend growth per year on average over the past nine years. Both per-share earnings and dividends have both been growing rapidly in recent times, which is great to see.
The Bottom Line
Is Alexander Forbes Group Holdings an attractive dividend stock, or better left on the shelf? Alexander Forbes Group Holdings has been generating credible earnings per share growth, although its dividend payments were not adequately covered by earnings. In sum this is a middling combination, and we find it hard to get excited about the company from a dividend perspective.
With that being said, if dividends aren't your biggest concern with Alexander Forbes Group Holdings, you should know about the other risks facing this business. Case in point: We've spotted 2 warning signs for Alexander Forbes Group Holdings 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.
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.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com
