Three Days Left To Buy Restaurant Brands International Limited Partnership (TSE:QSP.UN) Before The Ex-Dividend Date

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 Restaurant Brands International Limited Partnership (TSE:QSP.UN) is about to go ex-dividend in just 3 days. The ex-dividend date is commonly two business days before the record date, which is the cut-off date for shareholders to be present on the company's books to be eligible for a dividend payment. 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 Restaurant Brands International Limited Partnership's shares on or after the 21st of March will not receive the dividend, which will be paid on the 4th of April.

The company's next dividend payment will be US$0.62 per share, on the back of last year when the company paid a total of US$2.48 to shareholders. Looking at the last 12 months of distributions, Restaurant Brands International Limited Partnership has a trailing yield of approximately 3.7% on its current stock price of CA$95.18. We love seeing companies pay a dividend, but it's also important to be sure that laying the golden eggs isn't going to kill our golden goose! That's why we should always check whether the dividend payments appear sustainable, and if the company is growing.

View our latest analysis for Restaurant Brands International Limited Partnership

If a company pays out more in dividends than it earned, then the dividend might become unsustainable - hardly an ideal situation. Restaurant Brands International Limited Partnership is paying out an acceptable 54% of its profit, a common payout level among most companies. Yet cash flow is typically more important than profit for assessing dividend sustainability, so we should always check if the company generated enough cash to afford its dividend. It paid out 79% of its free cash flow as dividends, which is within usual limits but will limit the company's ability to lift the dividend if there's no growth.

It's positive to see that Restaurant Brands International Limited Partnership's dividend is covered by both profits and cash flow, since this is generally a sign that the dividend is sustainable, and a lower payout ratio usually suggests a greater margin of safety before the dividend gets cut.

Click here to see how much of its profit Restaurant Brands International Limited Partnership paid out over the last 12 months.

Have Earnings And Dividends Been Growing?

Stocks in companies that generate sustainable earnings growth often make the best dividend prospects, as it is easier to lift the dividend when earnings are rising. Investors love dividends, so if earnings fall and the dividend is reduced, expect a stock to be sold off heavily at the same time. With that in mind, we're encouraged by the steady growth at Restaurant Brands International Limited Partnership, with earnings per share up 8.9% on average over the last five years. Decent historical earnings per share growth suggests Restaurant Brands International Limited Partnership has been effectively growing value for shareholders. However, it's now paying out more than half its earnings as dividends. If management lifts the payout ratio further, we'd take this as a tacit signal that the company's growth prospects are slowing.

Many investors will assess a company's dividend performance by evaluating how much the dividend payments have changed over time. Since the start of our data, 10 years ago, Restaurant Brands International Limited Partnership has lifted its dividend by approximately 21% a year on average. It's encouraging to see the company lifting dividends while earnings are growing, suggesting at least some corporate interest in rewarding shareholders.

Final Takeaway

Is Restaurant Brands International Limited Partnership worth buying for its dividend? Earnings per share have been growing modestly and Restaurant Brands International Limited Partnership paid out a bit over half of its earnings and free cash flow last year. In summary, it's hard to get excited about Restaurant Brands International Limited Partnership from a dividend perspective.

If you want to look further into Restaurant Brands International Limited Partnership, it's worth knowing the risks this business faces. Our analysis shows 2 warning signs for Restaurant Brands International Limited Partnership and you should be aware of them before buying any shares.

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

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.