Only One Day Left To Cash In On Brooks Macdonald Group's (LON:BRK) Dividend

Readers hoping to buy Brooks Macdonald Group plc (LON:BRK) for its dividend will need to make their move shortly, as the stock is about to trade ex-dividend. The ex-dividend date is commonly two business days 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 important as the process of settlement involves at least two full business days. So if you miss that date, you would not show up on the company's books on the record date. Thus, you can purchase Brooks Macdonald Group's shares before the 18th of September in order to receive the dividend, which the company will pay on the 4th of November.

The company's next dividend payment will be UK£0.51 per share, on the back of last year when the company paid a total of UK£0.81 to shareholders. Last year's total dividend payments show that Brooks Macdonald Group has a trailing yield of 4.4% on the current share price of UK£18.40. 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! That's why we should always check whether the dividend payments appear sustainable, and if the company is growing.

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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. Brooks Macdonald Group paid out 113% of profit in the past year, which we think is typically not sustainable unless there are mitigating characteristics such as unusually strong cash flow or a large cash balance.

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.

Check out our latest analysis for Brooks Macdonald Group

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 business enters a downturn and the dividend is cut, the company could see its value fall precipitously. For this reason, we're glad to see Brooks Macdonald Group's earnings per share have risen 12% per annum over the last five years.

The main way most investors will assess a company's dividend prospects is by checking the historical rate of dividend growth. In the last 10 years, Brooks Macdonald Group has lifted its dividend by approximately 11% a year on average. Both per-share earnings and dividends have both been growing rapidly in recent times, which is great to see.

Final Takeaway

Has Brooks Macdonald Group got what it takes to maintain its dividend payments? Brooks Macdonald Group has been generating credible earnings per share growth, although its dividend payments were not adequately covered by earnings. We think there are likely better opportunities out there.

If you want to look further into Brooks Macdonald Group, it's worth knowing the risks this business faces. Every company has risks, and we've spotted 1 warning sign for Brooks Macdonald Group 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.