Here's What We Like About National Marine Dredging's (ADX:NMDC) Upcoming Dividend

Regular readers will know that we love our dividends at Simply Wall St, which is why it's exciting to see National Marine Dredging Company (ADX:NMDC) is about to trade ex-dividend in the next three 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. It is important to be aware of the ex-dividend date because any trade on the stock needs to have been settled on or before the record date. Thus, you can purchase National Marine Dredging's shares before the 15th of March in order to receive the dividend, which the company will pay on the 8th of April.

The company's next dividend payment will be د.إ0.75 per share. Last year, in total, the company distributed د.إ0.75 to shareholders. Based on the last year's worth of payments, National Marine Dredging stock has a trailing yield of around 2.5% on the current share price of د.إ29.60. Dividends are an important source of income to many shareholders, but the health of the business is crucial to maintaining those dividends. As a result, readers should always check whether National Marine Dredging has been able to grow its dividends, or if the dividend might be cut.

View our latest analysis for National Marine Dredging

If a company pays out more in dividends than it earned, then the dividend might become unsustainable - hardly an ideal situation. National Marine Dredging paid out a comfortable 29% of its profit last year.

Click here to see how much of its profit National Marine Dredging 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. Investors love dividends, so if earnings fall and the dividend is reduced, expect a stock to be sold off heavily at the same time. It's encouraging to see National Marine Dredging has grown its earnings rapidly, up 29% a year for the past five years. National Marine Dredging is paying out less than half its earnings and cash flow, while simultaneously growing earnings per share at a rapid clip. Companies with growing earnings and low payout ratios are often the best long-term dividend stocks, as the company can both grow its earnings and increase the percentage of earnings that it pays out, essentially multiplying the dividend.

Many investors will assess a company's dividend performance by evaluating how much the dividend payments have changed over time. National Marine Dredging has delivered an average of 36% per year annual increase in its dividend, based on the past three years of dividend payments. It's great to see earnings per share growing rapidly over several years, and dividends per share growing right along with it.

The Bottom Line

Should investors buy National Marine Dredging for the upcoming dividend? Typically, companies that are growing rapidly and paying out a low fraction of earnings are keeping the profits for reinvestment in the business. This is one of the most attractive investment combinations under this analysis, as it can create substantial value for investors over the long run. Overall, National Marine Dredging looks like a promising dividend stock in this analysis, and we think it would be worth investigating further.

Want to learn more about National Marine Dredging? Here's a visualisation of its historical rate of revenue and earnings growth.

A common investing mistake is buying the first interesting stock you see. Here you can find a full list of high-yield 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.