Wealth First Portfolio Managers Limited (NSE:WEALTH) Looks Interesting, And It's About To Pay A Dividend

Readers hoping to buy Wealth First Portfolio Managers Limited (NSE:WEALTH) for its dividend will need to make their move shortly, as the stock is about to trade ex-dividend. 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. It is important to be aware of the ex-dividend date because any trade on the stock needs to have been settled on or before the record date. Accordingly, Wealth First Portfolio Managers investors that purchase the stock on or after the 20th of August will not receive the dividend, which will be paid on the 26th of September.

The company's next dividend payment will be ₹7.00 per share, and in the last 12 months, the company paid a total of ₹7.00 per share. Calculating the last year's worth of payments shows that Wealth First Portfolio Managers has a trailing yield of 0.5% on the current share price of ₹1310.25. Dividends are an important source of income to many shareholders, but the health of the business is crucial to maintaining those dividends. So we need to check whether the dividend payments are covered, and if earnings are growing.

Check out our latest analysis for Wealth First Portfolio Managers

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. Wealth First Portfolio Managers has a low and conservative payout ratio of just 23% of its income after tax.

Generally speaking, the lower a company's payout ratios, the more resilient its dividend usually is.

Click here to see how much of its profit Wealth First Portfolio Managers 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. If earnings decline and the company is forced to cut its dividend, investors could watch the value of their investment go up in smoke. It's encouraging to see Wealth First Portfolio Managers has grown its earnings rapidly, up 47% a year for the past five years.

The main way most investors will assess a company's dividend prospects is by checking the historical rate of dividend growth. Since the start of our data, six years ago, Wealth First Portfolio Managers has lifted its dividend by approximately 51% a year on average. It's great to see earnings per share growing rapidly over several years, and dividends per share growing right along with it.

Final Takeaway

Is Wealth First Portfolio Managers an attractive dividend stock, or better left on the shelf? Companies like Wealth First Portfolio Managers that are growing rapidly and paying out a low fraction of earnings, are usually reinvesting heavily in their business. This is one of the most attractive investment combinations under this analysis, as it can create substantial value for investors over the long run. Overall, Wealth First Portfolio Managers looks like a promising dividend stock in this analysis, and we think it would be worth investigating further.

So while Wealth First Portfolio Managers looks good from a dividend perspective, it's always worthwhile being up to date with the risks involved in this stock. For example - Wealth First Portfolio Managers has 2 warning signs we think you should be aware of.

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.