Be Sure To Check Out Mortgage Advice Bureau (Holdings) plc (LON:MAB1) Before It Goes Ex-Dividend

Regular readers will know that we love our dividends at Simply Wall St, which is why it's exciting to see Mortgage Advice Bureau (Holdings) plc (LON:MAB1) is about to trade ex-dividend in the next three days. Ex-dividend means that investors that purchase the stock on or after the 26th of November will not receive this dividend, which will be paid on the 18th of December.

Mortgage Advice Bureau (Holdings)'s next dividend payment will be UK£0.064 per share, on the back of last year when the company paid a total of UK£0.17 to shareholders. Calculating the last year's worth of payments shows that Mortgage Advice Bureau (Holdings) has a trailing yield of 1.6% on the current share price of £8.08. 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! As a result, readers should always check whether Mortgage Advice Bureau (Holdings) has been able to grow its dividends, or if the dividend might be cut.

See our latest analysis for Mortgage Advice Bureau (Holdings)

If a company pays out more in dividends than it earned, then the dividend might become unsustainable - hardly an ideal situation. Mortgage Advice Bureau (Holdings) is paying out just 24% of its profit after tax, which is comfortably low and leaves plenty of breathing room in the case of adverse events.

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?

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. If earnings decline and the company is forced to cut its dividend, investors could watch the value of their investment go up in smoke. That's why it's comforting to see Mortgage Advice Bureau (Holdings)'s earnings have been skyrocketing, up 22% per annum 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 six years, Mortgage Advice Bureau (Holdings) has increased its dividend at approximately 36% a year on average. It's exciting to see that both earnings and dividends per share have grown rapidly over the past few years.

Final Takeaway

Should investors buy Mortgage Advice Bureau (Holdings) for the upcoming dividend? Companies like Mortgage Advice Bureau (Holdings) that are growing rapidly and paying out a low fraction of earnings, are usually reinvesting heavily in their business. Perhaps even more importantly - this can sometimes signal management is focused on the long term future of the business. Mortgage Advice Bureau (Holdings) ticks a lot of boxes for us from a dividend perspective, and we think these characteristics should mark the company as deserving of further attention.

With that in mind, a critical part of thorough stock research is being aware of any risks that stock currently faces. In terms of investment risks, we've identified 2 warning signs with Mortgage Advice Bureau (Holdings) and understanding them should be part of your investment process.

We wouldn't recommend just buying the first dividend stock you see, though. Here's a list of interesting 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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