Some investors rely on dividends to increase their wealth, and if you are one of those dividend researchers, you may be interested in knowing this. Sandon Capital Investments Limited (ASX: SNC) Is about to issue a dividend in just four days. The ex-dividend date is one business day prior to the listing date, which is the cut-off date on which shareholders will be present in the Company’s books to be eligible for a dividend payment. The ex-dividend date is important as the settlement process involves two full business days. So if you miss this date, it will not appear in the company books on the documentation date. In other words, investors can purchase the shares of Sandon Capital Instruments before November 30 in order to be entitled to a dividend to be paid on December 20.
The company’s next dividend payment will be A $ 0.01 per share, against the background of last year, when the company paid A $ 0.052 to shareholders. Based on last year’s payment value, Sandon Capital Investments has a trailing return of 5.3% on the current share price of A $ 0.99. Dividends are a major contributor to return on investment for long-term holders, but only if the dividend continues to be paid. So we need to check if the dividend payments are covered, and if the profits are increasing.
Dividends are usually paid from the company’s revenue, so if a company pays more than it has earned, its dividend is usually at a higher risk of being cut. Sandon Capital Investments paid only 15% of its profit last year, which we believe is conservatively low and leaves a lot of room for unforeseen circumstances.
In general, the lower a company’s payment ratio, the more durable its dividend is generally.
Have profits and dividends increased?
Businesses with strong growth prospects usually make the best dividend payers, as it is easier to grow dividends when earnings per share improve. If profits fall and the company is forced to cut its dividend, investors can see the value of their investment rising in smoke. It is therefore comforting to see the profits of Sandon Capital Investments skyrocketing, an increase of 39% per year over the last five years.
The main way most investors will appreciate a company’s dividend prospects is by examining the historical rate of dividend growth. Since the beginning of our data, seven years ago, Sandon Capital Investments has raised its dividend by about 4.0% per year on average. It’s good to see that both profit and dividend have improved – although the former has risen much faster than the latter, perhaps because the company is reinvesting more than its profits in growth.
Is Sandon Capital Investments worth buying for its dividend? Typically, companies that grow quickly and pay a low portion of profits keep the profits for reinvestment in the business. This strategy can add significant value to shareholders in the long run – as long as it is carried out without issuing too many new shares. Sandon Capital Investments marks a lot of boxes for us from a dividend standpoint, and we think these characteristics should mark the company properly for further attention.
With that in mind, a critical part of thorough stock research is to be aware of all the risks the stock now faces. Every company has risks, and we identified 3 warning signs for Sandon Capital Investments You need to know about.
A common mistake in investing is to buy the first interesting stock you see. Here you can find A list of promising dividend stocks with a return of more than 2% and a close dividend.
This article by Simply Wall St is general in nature. We provide interpretation based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended for financial advice. It does not constitute a recommendation to buy or sell any stock, nor does it take into account your goals, or your financial situation. We strive to bring you focused long-term analysis driven by basic data. Please note that our analysis may not take into account the latest postings of the company that are sensitive to prices or quality material. Simply Wall St has no position in any of the stocks mentioned.
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