British & American Investment Trust PLC (LON:BAF) Pays A UK£0.018 Dividend In Just Three Days

Regular readers will know that we love our dividends at Simply Wall St, which is why it's exciting to see British & American Investment Trust PLC (LON:BAF) is about to trade ex-dividend in the next 3 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. Thus, you can purchase British & American Investment Trust's shares before the 8th of December in order to receive the dividend, which the company will pay on the 22nd of December.

The company's next dividend payment will be UK£0.018 per share, and in the last 12 months, the company paid a total of UK£0.035 per share. Calculating the last year's worth of payments shows that British & American Investment Trust has a trailing yield of 8.0% on the current share price of £0.32. If you buy this business for its dividend, you should have an idea of whether British & American Investment Trust's dividend is reliable and sustainable. That's why we should always check whether the dividend payments appear sustainable, and if the company is growing.

Check out our latest analysis for British & American Investment Trust

If a company pays out more in dividends than it earned, then the dividend might become unsustainable - hardly an ideal situation. British & American Investment Trust paid a dividend last year despite being unprofitable. This might be a one-off event, but it's not a sustainable state of affairs in the long run. British & American Investment Trust paid a dividend despite reporting negative free cash flow last year. That's typically a bad combination and - if this were more than a one-off - not sustainable.

Click here to see how much of its profit British & American Investment Trust paid out over the last 12 months.

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. Investors love dividends, so if earnings fall and the dividend is reduced, expect a stock to be sold off heavily at the same time. British & American Investment Trust was unprofitable last year, but at least the general trend suggests its earnings have been improving over the past five years. Even so, an unprofitable company whose business does not quickly recover is usually not a good candidate for dividend investors.

The main way most investors will assess a company's dividend prospects is by checking the historical rate of dividend growth. British & American Investment Trust has seen its dividend decline 10% per annum on average over the past 10 years, which is not great to see.

Get our latest analysis on British & American Investment Trust's balance sheet health here.

Final Takeaway

Is British & American Investment Trust worth buying for its dividend? It's not great to see the company paying a dividend despite being loss-making over the last year. We think there are likely better opportunities out there.

With that being said, if dividends aren't your biggest concern with British & American Investment Trust, you should know about the other risks facing this business. To help with this, we've discovered 4 warning signs for British & American Investment Trust that you should be aware of before investing in their shares.

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.