Public Policy Holding Company, Inc. (LON:PPHC) Will Pay A US$0.047 Dividend In Three Days

Public Policy Holding Company, Inc. (LON:PPHC) stock is about to trade ex-dividend in 3 days. The ex-dividend date is one business day 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. The ex-dividend date is of consequence because whenever a stock is bought or sold, the trade takes at least two business day to settle. In other words, investors can purchase Public Policy Holding Company's shares before the 26th of September in order to be eligible for the dividend, which will be paid on the 25th of October.

The company's next dividend payment will be US$0.047 per share. Last year, in total, the company distributed US$0.14 to shareholders. Based on the last year's worth of payments, Public Policy Holding Company stock has a trailing yield of around 8.2% on the current share price of UK£1.31. Dividends are a major contributor to investment returns for long term holders, but only if the dividend continues to be paid. We need to see whether the dividend is covered by earnings and if it's growing.

View our latest analysis for Public Policy Holding Company

If a company pays out more in dividends than it earned, then the dividend might become unsustainable - hardly an ideal situation. Public Policy Holding Company's dividend is not well covered by earnings, as the company lost money last year. This is not a sustainable state of affairs, so it would be worth investigating if earnings are expected to recover. With the recent loss, it's important to check if the business generated enough cash to pay its dividend. If Public Policy Holding Company didn't generate enough cash to pay the dividend, then it must have either paid from cash in the bank or by borrowing money, neither of which is sustainable in the long term. Over the last year it paid out 74% of its free cash flow as dividends, within the usual range for most companies.

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. Public Policy Holding Company was unprofitable last year, but at least the general trend suggests its earnings have been improving over the past three years. Even so, an unprofitable company whose business does not quickly recover is usually not a good candidate for dividend investors.

Many investors will assess a company's dividend performance by evaluating how much the dividend payments have changed over time. Public Policy Holding Company has seen its dividend decline 1.7% per annum on average over the past two years, which is not great to see.

Remember, you can always get a snapshot of Public Policy Holding Company's financial health, by checking our visualisation of its financial health, here.

The Bottom Line

Is Public Policy Holding Company an attractive dividend stock, or better left on the shelf? We're a bit uncomfortable with it paying a dividend while being loss-making. However, we note that the dividend was covered by cash flow. Overall, it's not a bad combination, but we feel that there are likely more attractive dividend prospects out there.

With that being said, if dividends aren't your biggest concern with Public Policy Holding Company, you should know about the other risks facing this business. Every company has risks, and we've spotted 3 warning signs for Public Policy Holding Company you should know about.

Generally, we wouldn't recommend just buying the first dividend stock you see. Here's a curated list of interesting stocks that are strong dividend payers.

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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.