Be Sure To Check Out Findev Inc. (CVE:FDI) Before It Goes Ex-Dividend

Some investors rely on dividends for growing their wealth, and if you're one of those dividend sleuths, you might be intrigued to know that Findev Inc. (CVE:FDI) is about to go ex-dividend in just four days. This means that investors who purchase shares on or after the 25th of March will not receive the dividend, which will be paid on the 9th of April.

Findev's upcoming dividend is CA$0.0075 a share, following on from the last 12 months, when the company distributed a total of CA$0.03 per share to shareholders. Calculating the last year's worth of payments shows that Findev has a trailing yield of 5.9% on the current share price of CA$0.51. If you buy this business for its dividend, you should have an idea of whether Findev's dividend is reliable and sustainable. So we need to check whether the dividend payments are covered, and if earnings are growing.

View our latest analysis for Findev

Dividends are typically paid out of company income, so if a company pays out more than it earned, its dividend is usually at a higher risk of being cut. Fortunately Findev's payout ratio is modest, at just 47% of profit.

Generally speaking, the lower a company's payout ratios, the more resilient its dividend usually is.

Click here to see how much of its profit Findev 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. That's why it's comforting to see Findev's earnings have been skyrocketing, up 77% per annum for the past five years.

The main way most investors will assess a company's dividend prospects is by checking the historical rate of dividend growth. It looks like the Findev dividends are largely the same as they were four years ago.

To Sum It Up

From a dividend perspective, should investors buy or avoid Findev? Companies like Findev that are growing rapidly and paying out a low fraction of earnings, are usually reinvesting heavily in their business. Perhaps even more importantly - this can sometimes signal management is focused on the long term future of the business. We think this is a pretty attractive combination, and would be interested in investigating Findev more closely.

On that note, you'll want to research what risks Findev is facing. To help with this, we've discovered 3 warning signs for Findev that you should be aware of before investing in their shares.

We wouldn't recommend just buying the first dividend stock you see, though. Here's a list of interesting 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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