Don't Buy VH Global Energy Infrastructure PLC (LON:ENRG) For Its Next Dividend Without Doing These Checks

It looks like VH Global Energy Infrastructure PLC (LON:ENRG) is about to go ex-dividend in the next three days. The ex-dividend date is usually set to be two business days before the record date, which is the cut-off date on which you must be present on the company's books as a shareholder in order to receive the dividend. The ex-dividend date is important because any transaction on a stock needs to have been settled before the record date in order to be eligible for a dividend. Accordingly, VH Global Energy Infrastructure investors that purchase the stock on or after the 5th of June will not receive the dividend, which will be paid on the 26th of June.

The company's next dividend payment will be UK£0.0145 per share, and in the last 12 months, the company paid a total of UK£0.057 per share. Based on the last year's worth of payments, VH Global Energy Infrastructure has a trailing yield of 8.6% on the current stock price of UK£0.674. If you buy this business for its dividend, you should have an idea of whether VH Global Energy Infrastructure's dividend is reliable and sustainable. So we need to investigate whether VH Global Energy Infrastructure can afford its dividend, and if the dividend could grow.

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Dividends are typically paid out of company income, so if a company pays out more than it earned, its dividend is usually at a higher risk of being cut. VH Global Energy Infrastructure reported a loss last year, so it's not great to see that it has continued paying a dividend.

Check out our latest analysis for VH Global Energy Infrastructure

Click here to see how much of its profit VH Global Energy Infrastructure paid out over the last 12 months.

Have Earnings And Dividends Been Growing?

Businesses with shrinking earnings are tricky from a dividend perspective. If business enters a downturn and the dividend is cut, the company could see its value fall precipitously. VH Global Energy Infrastructure reported a loss last year, and the general trend suggests its earnings have also been declining in recent years, making us wonder if the dividend is at risk.

Many investors will assess a company's dividend performance by evaluating how much the dividend payments have changed over time. Since the start of our data, four years ago, VH Global Energy Infrastructure has lifted its dividend by approximately 23% a year on average.

Get our latest analysis on VH Global Energy Infrastructure's balance sheet health here.

Final Takeaway

From a dividend perspective, should investors buy or avoid VH Global Energy Infrastructure? First, it's not great to see the company paying a dividend despite being loss-making over the last year. Worse, the general trend in its earnings looks negative in recent years. 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 VH Global Energy Infrastructure as an investment, you'll find it beneficial to know what risks this stock is facing. Every company has risks, and we've spotted 3 warning signs for VH Global Energy Infrastructure (of which 2 shouldn't be ignored!) you should know about.

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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.