Yahoo Finance Geneva Finance (NZSE:GFL) Could Be A Buy For Its Upcoming Dividend
Some investors rely on dividends for growing their wealth, and if you're one of those dividend sleuths, you might be intrigued to know that Geneva Finance Limited (NZSE:GFL) is about to go ex-dividend in just 4 days. Investors can purchase shares before the 10th of December in order to be eligible for this dividend, which will be paid on the 15th of December.
Geneva Finance's next dividend payment will be NZ$0.013 per share, and in the last 12 months, the company paid a total of NZ$0.028 per share. Looking at the last 12 months of distributions, Geneva Finance has a trailing yield of approximately 5.6% on its current stock price of NZ$0.495. If you buy this business for its dividend, you should have an idea of whether Geneva Finance's dividend is reliable and sustainable. As a result, readers should always check whether Geneva Finance has been able to grow its dividends, or if the dividend might be cut.
View our latest analysis for Geneva Finance
Dividends are usually paid out of company profits, so if a company pays out more than it earned then its dividend is usually at greater risk of being cut. Geneva Finance paid out a comfortable 38% of its profit last year.
When a company paid out less in dividends than it earned in profit, this generally suggests its dividend is affordable. The lower the % of its profit that it pays out, the greater the margin of safety for the dividend if the business enters a downturn.
Click here to see how much of its profit Geneva Finance paid out over the last 12 months.
Have Earnings And Dividends Been Growing?
Companies with consistently growing earnings per share generally make the best dividend stocks, as they usually find it easier to grow dividends per share. If earnings decline and the company is forced to cut its dividend, investors could watch the value of their investment go up in smoke. Fortunately for readers, Geneva Finance's earnings per share have been growing at 17% a year for the past five years.
Many investors will assess a company's dividend performance by evaluating how much the dividend payments have changed over time. In the past four years, Geneva Finance has increased its dividend at approximately 8.3% a year on average. It's encouraging to see the company lifting dividends while earnings are growing, suggesting at least some corporate interest in rewarding shareholders.
To Sum It Up
Should investors buy Geneva Finance for the upcoming dividend? Companies like Geneva Finance that are growing rapidly and paying out a low fraction of earnings, are usually reinvesting heavily in their business. Perhaps even more importantly - this can sometimes signal management is focused on the long term future of the business. Geneva Finance ticks a lot of boxes for us from a dividend perspective, and we think these characteristics should mark the company as deserving of further attention.
With that in mind, a critical part of thorough stock research is being aware of any risks that stock currently faces. Be aware that Geneva Finance is showing 3 warning signs in our investment analysis, and 1 of those is concerning...
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.
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. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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