Should Income Investors Look At Fiera Capital Corporation (TSE:FSZ) Before Its Ex-Dividend?

Fiera Capital Corporation (TSE:FSZ) is about to trade ex-dividend in the next four days. Typically, the ex-dividend date is one business day before the record date which is the date on which a company determines the shareholders eligible to receive a dividend. The ex-dividend date is an important date to be aware of as any purchase of the stock made on or after this date might mean a late settlement that doesn't show on the record date. This means that investors who purchase Fiera Capital's shares on or after the 19th of November will not receive the dividend, which will be paid on the 19th of December.

The company's upcoming dividend is CA$0.216 a share, following on from the last 12 months, when the company distributed a total of CA$0.86 per share to shareholders. Last year's total dividend payments show that Fiera Capital has a trailing yield of 8.7% on the current share price of CA$9.95. Dividends are an important source of income to many shareholders, but the health of the business is crucial to maintaining those dividends. We need to see whether the dividend is covered by earnings and if it's growing.

See our latest analysis for Fiera Capital

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. Fiera Capital distributed an unsustainably high 142% of its profit as dividends to shareholders last year. Without more sustainable payment behaviour, the dividend looks precarious.

When a company pays out a dividend that is not well covered by profits, the dividend is generally seen as more vulnerable to being cut.

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

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 fall far enough, the company could be forced to cut its dividend. It's encouraging to see Fiera Capital has grown its earnings rapidly, up 42% 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. Fiera Capital has delivered 7.0% dividend growth per year on average over the past 10 years. 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

Is Fiera Capital an attractive dividend stock, or better left on the shelf? We're not enthused to see Fiera Capital's dividend was not well covered by earnings over the last year, although it is great to see earnings growing. In sum this is a middling combination, and we find it hard to get excited about the company from a dividend perspective.

If you're not too concerned about Fiera Capital's ability to pay dividends, you should still be mindful of some of the other risks that this business faces. For instance, we've identified 5 warning signs for Fiera Capital (1 is a bit unpleasant) you should be aware of.

If you're in the market for strong dividend payers, we recommend checking our selection of top dividend stocks.

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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.