It looks like Venture capital company limited (SGX: V03) is set to be ex-dividend within the next three days. The ex-dividend date is one working day before the registration date, which is the deadline by which shareholders must be present on the books of the company to be eligible for the payment of a dividend. The ex-dividend date is important because any share transaction must have been settled before the registration date to be eligible for a dividend. This means that investors who buy Venture shares from September 3 will not receive the dividend, which will be paid on September 17.
The company’s next dividend payment will be S $ 0.25 per share, compared to last year when the company paid a total of S $ 0.75 to shareholders. Based on the value of last year’s payouts, the Venture share has a rolling yield of around 3.9% on the current share price of SGD 19.05. We love to see companies pay a dividend, but it’s also important to be sure that laying the golden eggs isn’t going to kill our goose that lays the golden eggs! Therefore, readers should always check whether Venture has been able to increase its dividends or if the dividend could be reduced.
See our latest review for Venture
Dividends are usually paid out of business income, so if a business pays more than it earned, its dividend is usually at risk of being reduced. Venture paid out more than half (71%) of its profits last year, which is a steady payout ratio for most companies. A useful secondary check can be to assess whether Venture has generated enough free cash flow to pay its dividend. Over the past year, it has paid out 70% of its free cash flow in the form of dividends, within the range typical of most companies.
It is positive to see that Venture’s dividend is covered by both earnings and cash flow, as this is usually a sign that the dividend is sustainable, and a lower payout ratio usually suggests a larger margin. security before the dividend is cut.
Click here to view the company’s payout ratio, as well as analysts’ estimates of its future dividends.
Have Profits and Dividends Increased?
Stocks of companies that generate sustainable earnings growth often offer the best dividend prospects because it’s easier to raise the dividend when earnings rise. Investors love dividends, so if profits fall and the dividend is reduced, expect a stock to be sold massively at the same time. Luckily for readers, Venture’s earnings per share have grown 14% per year over the past five years. Venture pays out just over half of its profits, suggesting the company strikes a balance between reinvesting in growth and paying dividends. This is a reasonable combination that could portend further dividend increases in the future.
Most investors will primarily assess a company’s dividend prospects by checking the historical rate of dividend growth. Since our data began 10 years ago, Venture has increased its dividend by around 3.2% per year on average. Earnings per share have grown much faster than dividends, potentially because Venture is withholding more of its earnings to grow the business.
Does Venture have what it takes to maintain its dividend payments? It’s good to see profits go up because all of the best dividend-paying stocks increase their profits significantly over the long term. However, it should also be noted that Venture pays more than half of its earnings and cash flow as profits, which could limit dividend growth if earnings growth slows. Overall, we are not extremely bearish on the stock, but there are probably better dividend investments.
With that in mind, an essential part of in-depth stock research is being aware of the risks stocks currently face. Concrete example: we have spotted 1 warning sign for Venture you must be aware.
However, we don’t recommend simply buying the first dividend stock you see. Here is a list of interesting dividend paying stocks with a yield above 2% and a dividend coming soon.
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This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts using only 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 into account your goals or your financial situation. Our aim is to bring you long-term, targeted analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price sensitive companies or qualitative documents. Simply Wall St has no position in any of the stocks mentioned.
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