We Wouldn't Be Too Quick To Buy Guardian Capital Group Limited (TSE:GCG.A) Before It Goes Ex-Dividend

Guardian Capital Group Limited (TSE:GCG.A) is about to trade ex-dividend in the next four days. This means that investors who purchase shares on or after the 9th of July will not receive the dividend, which will be paid on the 17th of July.

Guardian Capital Group's next dividend payment will be CA$0.16 per share, on the back of last year when the company paid a total of CA$0.64 to shareholders. Last year's total dividend payments show that Guardian Capital Group has a trailing yield of 3.0% on the current share price of CA$21. If you buy this business for its dividend, you should have an idea of whether Guardian Capital Group's dividend is reliable and sustainable. That's why we should always check whether the dividend payments appear sustainable, and if the company is growing.

Check out our latest analysis for Guardian Capital Group

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. Guardian Capital Group paid a dividend last year despite being unprofitable. This might be a one-off event, but it's not a sustainable state of affairs in the long run.

Click here to see how much of its profit Guardian Capital Group paid out over the last 12 months.

Have Earnings And Dividends Been Growing?

Companies with falling earnings are riskier for dividend shareholders. If earnings fall far enough, the company could be forced to cut its dividend. Guardian Capital Group was unprofitable last year and, unfortunately, the general trend suggests its earnings have been in decline over the last five years, making us wonder if the dividend is sustainable at all.

Another key way to measure a company's dividend prospects is by measuring its historical rate of dividend growth. Guardian Capital Group has delivered an average of 16% per year annual increase in its dividend, based on the past ten years of dividend payments.

Get our latest analysis on Guardian Capital Group's balance sheet health here.

Final Takeaway

Has Guardian Capital Group got what it takes to maintain its dividend payments? It's definitely not great to see that it paid a dividend despite reporting a loss last year. Worse, the general trend in its earnings looks negative in recent times. All things considered, we're not optimistic about its dividend prospects, and would be inclined to leave it on the shelf for now.

With that in mind though, if the poor dividend characteristics of Guardian Capital Group don't faze you, it's worth being mindful of the risks involved with this business. For instance, we've identified 2 warning signs for Guardian Capital Group (1 is significant) you should be aware of.

A common investment mistake is buying the first interesting stock you see. Here you can find a list of promising dividend stocks with a greater than 2% yield and an upcoming dividend.

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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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