Euroz Hartleys Group Limited (ASX:EZL) Will Pay A AU$0.02 Dividend In Four Days

Readers hoping to buy Euroz Hartleys Group Limited (ASX:EZL) for its dividend will need to make their move shortly, as the stock is about to trade ex-dividend. The ex-dividend date is one business day before a company's record date, which is the date on which the company determines which shareholders are entitled 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 Euroz Hartleys Group's shares before the 10th of February in order to receive the dividend, which the company will pay on the 21st of February.

The company's next dividend payment will be AU$0.02 per share, and in the last 12 months, the company paid a total of AU$0.047 per share. Based on the last year's worth of payments, Euroz Hartleys Group stock has a trailing yield of around 4.8% on the current share price of AU$1.00. If you buy this business for its dividend, you should have an idea of whether Euroz Hartleys Group's dividend is reliable and sustainable. We need to see whether the dividend is covered by earnings and if it's growing.

Check out our latest analysis for Euroz Hartleys Group

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. Euroz Hartleys Group paid out 136% of profit in the past year, which we think is typically not sustainable unless there are mitigating characteristics such as unusually strong cash flow or a large cash balance.

Generally, the higher a company's payout ratio, the more the dividend is at risk of being reduced.

Click here to see how much of its profit Euroz Hartleys Group 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. It's encouraging to see Euroz Hartleys Group has grown its earnings rapidly, up 25% 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. Euroz Hartleys Group's dividend payments per share have declined at 9.3% per year on average over the past 10 years, which is uninspiring. It's unusual to see earnings per share increasing at the same time as dividends per share have been in decline. We'd hope it's because the company is reinvesting heavily in its business, but it could also suggest business is lumpy.

Final Takeaway

Is Euroz Hartleys Group an attractive dividend stock, or better left on the shelf? Euroz Hartleys Group has been generating credible earnings per share growth, although its dividend payments were not adequately covered by earnings. At best we would put it on a watch-list to see if business conditions improve, as it doesn't look like a clear opportunity right now.

With that being said, if dividends aren't your biggest concern with Euroz Hartleys Group, you should know about the other risks facing this business. To that end, you should learn about the 5 warning signs we've spotted with Euroz Hartleys Group (including 1 which doesn't sit too well with us).

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.