It looks like Dominion Lending Centres Inc. (TSE:DLCG) will trade ex-dividend for the next four days. The ex-dividend date is one business day before the record date, which is the date on which shareholders must be on the company’s books to be eligible to receive a dividend payment. The ex-dividend date is important because the settlement process takes two full business days, so if you miss this day, you won’t appear on the company’s books on the record date. So you can buy Dominion Lending Centres shares before August 30th to receive the dividend that the company will pay on September 16th.
The company’s next dividend payment will be CA$0.03 per share. Over the last 12 months, the company paid a total of CA$0.12 per share. Last year’s total dividend payments show that Dominion Lending Centres yields 3.1% on the current share price of CA$3.93. Dividends are an important source of income for many shareholders, but the health of the business is critical to maintaining those dividends, so we need to check if dividend payments are covered and if earnings are growing.
Check out our latest analysis for Dominion Lending Centres
Dividends are typically paid out of company profits, so if a company pays out more than it earns, there is usually a higher risk of a dividend cut. Dominion Lending Centres paid out 58 percent of its profits to its investors last year, a normal payout level for most companies.
If a company pays out less in dividends than it makes in profit, it generally indicates that its dividend is affordable. The lower the percentage of profit it pays out, the greater the margin of safety for the dividend if the company enters a recession.
Click here to see the company’s payout ratio as well as analyst estimates of its future dividends.
Have earnings and dividends increased?
Companies with strong growth prospects tend to make the best dividend payers, as it’s easier to increase the dividend when earnings per share are improving. If earnings fall enough, the company could be forced to cut its dividend. That’s why we’re pleased to see Dominion Lending Centres’ earnings per share have grown 19% annually over the past five years.
Most investors judge a company’s dividend prospects by its historical dividend growth rate. Dominion Lending Centres has increased its dividend by an average of 12% per year over the past eight years. Both earnings per share and dividends have risen sharply recently, which is encouraging.
The conclusion
Should investors buy or avoid Dominion Lending Centres from a dividend perspective? Earnings per share are growing attractively and Dominion Lending Centres is paying out just over half of its earnings. In summary, Dominion Lending Centres looks promising as a dividend stock and we recommend taking a closer look.
Even though Dominion Lending Centres looks good from a dividend perspective, it is still worth staying informed about the risks of this stock. Every company has risks, and we have 4 warning signs for Dominion Lending Centres (of which 1 is important!) that you should know.
In general, we would not recommend simply buying the first dividend stock you see. Here is a curated list of interesting stocks with high dividend numbers.
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This Simply Wall St article is of a general nature. We comment solely on the basis of historical data and analyst forecasts, using an unbiased methodology. Our articles do not constitute financial advice. It is not a recommendation to buy or sell any stock and does not take into account your objectives or financial situation. Our goal is to provide you with long-term analysis based on fundamental data. Note that our analysis may not take into account the latest price-sensitive company announcements or qualitative materials. Simply Wall St does not hold any of the stocks mentioned.
