Readers considering purchasing AUDIENCE ANALYTICS LIMITED. (Catalyst:1AZ) will need to act soon to claim its dividend, as the stock is about to trade ex-dividend. The ex-dividend date is usually set one business day before the record date. The record date is the deadline by which you must be listed on the company's books as a shareholder in order to receive dividends. When buying or selling stocks, the ex-dividend date is important because it takes at least two business days for the trade to settle. Therefore, an Audience Analytics investor who purchased shares after May 2nd will not receive the dividend, which will be paid to him on May 13th.
The company's next dividend payment will be S$0.017 per share. Last year, the company distributed a total of S$0.017 to shareholders. Audience Analytics has a yield to maturity of 5.5% on the current share price of S$0.31, based on the last year's worth of payments. We love to see companies pay dividends, but it's also important to make sure our golden goose doesn't die by laying golden eggs. So we need to investigate whether Audience Analytics can afford its dividend, and if the dividend could grow.
See the latest analysis from Audience Analytics.
Dividends are usually paid out of a company's profits. If a company pays more in dividends than it earned in profit, then the dividend might become unsustainable. Audience Analytics pays out 62% of its profits, which is a typical payout level for most companies. However, cash flow is typically more important than profit for assessing dividend sustainability, so we should always check if a company generated enough cash to pay its dividend. It paid out more than half (71%) of its free cash flow in the past year, which is within the average range for most companies.
It's positive to see that Audience Analytics's dividend is covered by both profit and cash flow. This usually indicates that the dividend is sustainable, as a lower payout ratio usually suggests a greater margin of safety before the dividend gets cut.
Click here to see how much profit Audience Analytics paid out over the last 12 months.
Are profits and dividends growing?
Companies with promising growth potential are usually the ones that pay the most dividends, since it's easier to grow dividends when earnings per share are improving. If profits decline and the company is forced to cut its dividend, investors could see the value of their investments explode. Fortunately for our readers, Audience Analytics' earnings per share have grown at an annual rate of 16% over the past three years. Audience Analytics has an average dividend payout ratio, which suggests a balance between earnings growth and returns to shareholders. Given the rapid growth rate of earnings per share and the current level of the dividend, it is likely that the dividend will increase further in the future.
The main way most investors assess a company's dividend prospects is by looking at its historical dividend growth rate. Audience Analytics has delivered an average dividend growth of 16% per year over the past two years. It's interesting to see that both earnings per share and dividends have grown rapidly over the past few years.
conclusion
Should investors buy Audience Analytics for its upcoming dividend? It's good to see earnings growth, since all the best dividend stocks have strong earnings growth over the long term. However, we also note that Audience Analytics pays out more than half of its revenue and cash flow as profit, which could limit dividend growth if earnings growth slows. Overall, this isn't a bad combination, but we feel there are likely more attractive dividend prospects out there.
With that in mind, the key to thorough stock research is to be aware of the risks currently facing a stock. To solve this, we discovered the following: 2 Warning Signs for Audience Analytics What you need to know before investing in stocks.
Generally speaking, we don't recommend just buying the first dividend stock you see.Here it is A curated list of interesting stocks with strong dividends.
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This article by Simply Wall St is general in nature. We provide commentary using only unbiased methodologies, based on historical data and analyst forecasts, and articles are not intended to be financial advice. This is not a recommendation to buy or sell any stock, and does not take into account your objectives or financial situation. We aim to provide long-term, focused analysis based on fundamental data. Note that our analysis may not factor in the latest announcements or qualitative material from price-sensitive companies. Simply Wall St has no position in any stocks mentioned.
