Sasken Technologies Limited (NSE:SASKEN) Stock Goes Ex-Dividend In Just Three Days

It looks like Sasken Technologies Limited (NSE:SASKEN) is about to go ex-dividend in the next three days. The ex-dividend date occurs one day before the record date which is the day on which shareholders need to be on the company's books in order 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. In other words, investors can purchase Sasken Technologies' shares before the 26th of July in order to be eligible for the dividend, which will be paid on the 28th of August.

The company's next dividend payment will be ₹13.00 per share. Last year, in total, the company distributed ₹25.00 to shareholders. Based on the last year's worth of payments, Sasken Technologies stock has a trailing yield of around 1.5% on the current share price of ₹1682.90. If you buy this business for its dividend, you should have an idea of whether Sasken Technologies's dividend is reliable and sustainable. So we need to check whether the dividend payments are covered, and if earnings are growing.

Check out our latest analysis for Sasken Technologies

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. That's why it's good to see Sasken Technologies paying out a modest 48% of its earnings. Yet cash flows are even more important than profits for assessing a dividend, so we need to see if the company generated enough cash to pay its distribution. It paid out more than half (73%) of its free cash flow in the past year, which is within an average range for most companies.

It's positive to see that Sasken Technologies's dividend is covered by both profits and cash flow, since this is generally a sign that the dividend is sustainable, and a lower payout ratio usually suggests a greater margin of safety before the dividend gets cut.

Click here to see how much of its profit Sasken Technologies paid out over the last 12 months.

Have Earnings And Dividends Been Growing?

Companies that aren't growing their earnings can still be valuable, but it is even more important to assess the sustainability of the dividend if it looks like the company will struggle to grow. If business enters a downturn and the dividend is cut, the company could see its value fall precipitously. That explains why we're not overly excited about Sasken Technologies's flat earnings over the past five years. It's better than seeing them drop, certainly, but over the long term, all of the best dividend stocks are able to meaningfully grow their earnings per share.

Many investors will assess a company's dividend performance by evaluating how much the dividend payments have changed over time. Sasken Technologies has delivered an average of 14% per year annual increase in its dividend, based on the past 10 years of dividend payments.

To Sum It Up

Has Sasken Technologies got what it takes to maintain its dividend payments? Earnings per share are down very slightly in recent times, and Sasken Technologies paid out less half its profit and more than half its cash flow as dividends, which is not the worst combination but could be better. In summary, it's hard to get excited about Sasken Technologies from a dividend perspective.

If you want to look further into Sasken Technologies, it's worth knowing the risks this business faces. Case in point: We've spotted 2 warning signs for Sasken Technologies you should be aware of.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com