We Wouldn't Be Too Quick To Buy Guardian Capital Group Limited (TSE:GCG.A) Before It Goes Ex-Dividend

Guardian Capital Group Limited (TSE:GCG.A) is about to trade ex-dividend in the next three days. Ex-dividend means that investors that purchase the stock on or after the 8th of January will not receive this dividend, which will be paid on the 18th of January.

Guardian Capital Group's next dividend payment will be CA$0.16 per share. Last year, in total, the company distributed CA$0.64 to shareholders. Based on the last year's worth of payments, Guardian Capital Group stock has a trailing yield of around 2.4% on the current share price of CA$26.95. If you buy this business for its dividend, you should have an idea of whether Guardian Capital Group's dividend is reliable and sustainable. So we need to investigate whether Guardian Capital Group can afford its dividend, and if the dividend could grow.

Check out our latest analysis for Guardian Capital Group

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. Guardian Capital Group reported a loss last year, so it's not great to see that it has continued paying a dividend.

Click here to see how much of its profit Guardian Capital Group paid out over the last 12 months.

Have Earnings And Dividends Been Growing?

Businesses with shrinking earnings are tricky from a dividend perspective. If earnings decline and the company is forced to cut its dividend, investors could watch the value of their investment go up in smoke. Guardian Capital Group was unprofitable last year and, unfortunately, the general trend suggests its earnings have been in decline over the last five years, making us wonder if the dividend is sustainable at all.

Another key way to measure a company's dividend prospects is by measuring its historical rate of dividend growth. In the past 10 years, Guardian Capital Group has increased its dividend at approximately 16% a year on average.

Get our latest analysis on Guardian Capital Group's balance sheet health here.

Final Takeaway

Should investors buy Guardian Capital Group for the upcoming dividend? It's hard to get past the idea of Guardian Capital Group paying a dividend despite reporting a loss over the past year - especially when the general trend in its earnings also looks to be negative. This is not an overtly appealing combination of characteristics, and we're just not that interested in this company's dividend.

With that being said, if you're still considering Guardian Capital Group as an investment, you'll find it beneficial to know what risks this stock is facing. For example, Guardian Capital Group has 2 warning signs (and 1 which is a bit concerning) 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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