Findev Inc. (CVE:FDI) Passed Our Checks, And It's About To Pay A CA$0.0075 Dividend

Findev Inc. (CVE:FDI) is about to trade ex-dividend in the next four days. This means that investors who purchase shares on or after the 30th of December will not receive the dividend, which will be paid on the 8th of January.

Findev's next dividend payment will be CA$0.0075 per share. Last year, in total, the company distributed CA$0.03 to shareholders. Looking at the last 12 months of distributions, Findev has a trailing yield of approximately 6.4% on its current stock price of CA$0.47. Dividends are an important source of income to many shareholders, but the health of the business is crucial to maintaining those dividends. 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 from company earnings. If a company pays more in dividends than it earned in profit, then the dividend could be unsustainable. That's why it's good to see Findev paying out a modest 47% of its earnings.

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?

Businesses with strong growth prospects usually make the best dividend payers, because it's easier to grow dividends when earnings per share are improving. Investors love dividends, so if earnings fall and the dividend is reduced, expect a stock to be sold off heavily at the same time. That's why it's comforting to see Findev's earnings have been skyrocketing, up 77% per annum 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. Findev's dividend payments are broadly unchanged compared to where they were four years ago.

Final Takeaway

Has Findev got what it takes to maintain its dividend payments? Typically, companies that are growing rapidly and paying out a low fraction of earnings are keeping the profits for reinvestment in the business. Perhaps even more importantly - this can sometimes signal management is focused on the long term future of the business. In summary, Findev appears to have some promise as a dividend stock, and we'd suggest taking a closer look at it.

So while Findev looks good from a dividend perspective, it's always worthwhile being up to date with the risks involved in this stock. For example, Findev has 3 warning signs (and 1 which is a bit unpleasant) we think you should know about.

If you're in the market for dividend stocks, we recommend checking our list of top 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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