Just Two Days Till Washington H. Soul Pattinson and Company Limited (ASX:SOL) Will Be Trading Ex-Dividend

It looks like Washington H. Soul Pattinson and Company Limited (ASX:SOL) is about to go ex-dividend in the next two days. Typically, the ex-dividend date is two business days before the record date, which is the date on which a company determines the shareholders eligible 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. This means that investors who purchase Washington H. Soul Pattinson's shares on or after the 21st of August will not receive the dividend, which will be paid on the 5th of September.

The company's next dividend payment will be AU$0.59 per share, on the back of last year when the company paid a total of AU$0.99 to shareholders. Last year's total dividend payments show that Washington H. Soul Pattinson has a trailing yield of 2.3% on the current share price of AU$42.59. If you buy this business for its dividend, you should have an idea of whether Washington H. Soul Pattinson's dividend is reliable and sustainable. As a result, readers should always check whether Washington H. Soul Pattinson has been able to grow its dividends, or if the dividend might be cut.

Trump has pledged to "unleash" American oil and gas and these 15 US stocks have developments that are poised to benefit.

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. Washington H. Soul Pattinson paid out 61% of its earnings to investors last year, a normal payout level for most businesses.

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.

View our latest analysis for Washington H. Soul Pattinson

Click here to see the company's payout ratio, plus analyst estimates of its future dividends.

Have Earnings And Dividends Been Growing?

Businesses with strong growth prospects usually make the best dividend payers, because it's easier to grow dividends when earnings per share are improving. If earnings fall far enough, the company could be forced to cut its dividend. This is why it's a relief to see Washington H. Soul Pattinson earnings per share are up 6.6% per annum over the last five years.

Another key way to measure a company's dividend prospects is by measuring its historical rate of dividend growth. In the past 10 years, Washington H. Soul Pattinson has increased its dividend at approximately 7.5% a year on average. We're glad to see dividends rising alongside earnings over a number of years, which may be a sign the company intends to share the growth with shareholders.

The Bottom Line

Has Washington H. Soul Pattinson got what it takes to maintain its dividend payments? Earnings per share have been growing at a reasonable rate, and the company is paying out a bit over half its earnings as dividends. In sum this is a middling combination, and we find it hard to get excited about the company from a dividend perspective.

If you want to look further into Washington H. Soul Pattinson, it's worth knowing the risks this business faces. For example, we've found 1 warning sign for Washington H. Soul Pattinson that we recommend you consider before investing in the business.

Generally, we wouldn't recommend just buying the first dividend stock you see. Here's a curated list of interesting stocks that are strong dividend payers.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.