Why You Might Be Interested In Alaris Equity Partners Income Trust (TSE:AD.UN) For Its Upcoming Dividend

Alaris Equity Partners Income Trust (TSE:AD.UN) stock is about to trade ex-dividend in four days. The ex-dividend date occurs one day before the record date which is the day on which shareholders need to be on the company's books in order 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. In other words, investors can purchase Alaris Equity Partners Income Trust's shares before the 28th of September in order to be eligible for the dividend, which will be paid on the 16th of October.

The company's next dividend payment will be CA$0.34 per share, and in the last 12 months, the company paid a total of CA$1.36 per share. Looking at the last 12 months of distributions, Alaris Equity Partners Income Trust has a trailing yield of approximately 9.2% on its current stock price of CA$14.8. Dividends are an important source of income to many shareholders, but the health of the business is crucial to maintaining those dividends. As a result, readers should always check whether Alaris Equity Partners Income Trust has been able to grow its dividends, or if the dividend might be cut.

View our latest analysis for Alaris Equity Partners Income Trust

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. Alaris Equity Partners Income Trust paid out 62% of its earnings to investors last year, a normal payout level for most businesses.

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

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 business enters a downturn and the dividend is cut, the company could see its value fall precipitously. It's encouraging to see Alaris Equity Partners Income Trust has grown its earnings rapidly, up 46% a year for the past 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, Alaris Equity Partners Income Trust has increased its dividend at approximately 1.3% a year on average. It's good to see both earnings and the dividend have improved - although the former has been rising much quicker than the latter, possibly due to the company reinvesting more of its profits in growth.

The Bottom Line

Is Alaris Equity Partners Income Trust an attractive dividend stock, or better left on the shelf? Earnings per share are growing nicely, and Alaris Equity Partners Income Trust is paying out a percentage of its earnings that is around the average for dividend-paying stocks. Overall, Alaris Equity Partners Income Trust looks like a promising dividend stock in this analysis, and we think it would be worth investigating further.

So while Alaris Equity Partners Income Trust looks good from a dividend perspective, it's always worthwhile being up to date with the risks involved in this stock. We've identified 2 warning signs with Alaris Equity Partners Income Trust (at least 1 which shouldn't be ignored), and understanding them should be part of your investment process.

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.