Yahoo Finance We Wouldn't Be Too Quick To Buy YeboYethu (RF) Limited (JSE:YYLBEE) Before It Goes Ex-Dividend
YeboYethu (RF) Limited (JSE:YYLBEE) is about to trade ex-dividend in the next 3 days. The ex-dividend date occurs one day before the record date which is the day on which shareholders need to be on the company's books in order to receive a dividend. The ex-dividend date is important because any transaction on a stock needs to have been settled before the record date in order to be eligible for a dividend. Therefore, if you purchase YeboYethu (RF)'s shares on or after the 13th of December, you won't be eligible to receive the dividend, when it is paid on the 19th of December.
The company's next dividend payment will be R0.70 per share. Last year, in total, the company distributed R1.77 to shareholders. Calculating the last year's worth of payments shows that YeboYethu (RF) has a trailing yield of 4.7% on the current share price of ZAR38. 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! As a result, readers should always check whether YeboYethu (RF) has been able to grow its dividends, or if the dividend might be cut.
See our latest analysis for YeboYethu (RF)
Dividends are typically paid from company earnings. If a company pays more in dividends than it earned in profit, then the dividend could be unsustainable. YeboYethu (RF) lost money last year, so the fact that it's paying a dividend is certainly disconcerting. There might be a good reason for this, but we'd want to look into it further before getting comfortable.
Click here to see how much of its profit YeboYethu (RF) 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. YeboYethu (RF) reported a loss last year, but at least the general trend suggests its income has been improving over the past five years. Even so, an unprofitable company whose business does not quickly recover is usually not a good candidate for dividend investors.
Another key way to measure a company's dividend prospects is by measuring its historical rate of dividend growth. YeboYethu (RF) has delivered an average of 7.9% per year annual increase in its dividend, based on the past six years of dividend payments. It's encouraging to see the company lifting dividends while earnings are growing, suggesting at least some corporate interest in rewarding shareholders.
Remember, you can always get a snapshot of YeboYethu (RF)'s financial health, by checking our visualisation of its financial health, here.
The Bottom Line
Is YeboYethu (RF) an attractive dividend stock, or better left on the shelf? It's hard to get used to YeboYethu (RF) paying a dividend despite reporting a loss over the past year. These characteristics don't generally lead to outstanding dividend performance, and investors may not be happy with the results of owning this stock for its dividend.
So if you're still interested in YeboYethu (RF) despite it's poor dividend qualities, you should be well informed on some of the risks facing this stock. Our analysis shows 3 warning signs for YeboYethu (RF) that we strongly recommend you have a look at before investing in the company.
If you're in the market for strong dividend payers, we recommend checking our selection of top dividend stocks.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an 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 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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