Advertisement

Is It Smart To Buy Fiducian Group Limited (ASX:FID) Before It Goes Ex-Dividend?

Regular readers will know that we love our dividends at Simply Wall St, which is why it's exciting to see Fiducian Group Limited (ASX:FID) is about to trade ex-dividend in the next 4 days. Investors can purchase shares before the 28th of February in order to be eligible for this dividend, which will be paid on the 16th of March.

Fiducian Group's next dividend payment will be AU$0.12 per share, and in the last 12 months, the company paid a total of AU$0.23 per share. Based on the last year's worth of payments, Fiducian Group has a trailing yield of 3.8% on the current stock price of A$6.08. 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! That's why we should always check whether the dividend payments appear sustainable, and if the company is growing.

Check out our latest analysis for Fiducian Group

If a company pays out more in dividends than it earned, then the dividend might become unsustainable - hardly an ideal situation. Fiducian Group is paying out an acceptable 67% of its profit, a common payout level among most companies.

Generally speaking, the lower a company's payout ratios, the more resilient its dividend usually is.

Click here to see how much of its profit Fiducian Group paid out over the last 12 months.

ASX:FID Historical Dividend Yield, February 23rd 2020
ASX:FID Historical Dividend Yield, February 23rd 2020

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 fall far enough, the company could be forced to cut its dividend. That's why it's comforting to see Fiducian Group's earnings have been skyrocketing, up 22% per annum for the past five years.

Another key way to measure a company's dividend prospects is by measuring its historical rate of dividend growth. In the past ten years, Fiducian Group has increased its dividend at approximately 14% a year on average. It's great to see earnings per share growing rapidly over several years, and dividends per share growing right along with it.

The Bottom Line

Has Fiducian Group got what it takes to maintain its dividend payments? Earnings per share are growing nicely, and Fiducian Group is paying out a percentage of its earnings that is around the average for dividend-paying stocks. We think this is a pretty attractive combination, and would be interested in investigating Fiducian Group more closely.

Want to learn more about Fiducian Group? Here's a visualisation of its historical rate of revenue and earnings growth.

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.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.