Don't Race Out To Buy GiXo Ltd. (TSE:9219) Just Because It's Going Ex-Dividend

Regular readers will know that we love our dividends at Simply Wall St, which is why it's exciting to see GiXo Ltd. (TSE:9219) is about to trade ex-dividend in the next three days. 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. The ex-dividend date is of consequence because whenever a stock is bought or sold, the trade takes at least two business day to settle. Accordingly, GiXo investors that purchase the stock on or after the 27th of December will not receive the dividend, which will be paid on the 1st of January.

The company's next dividend payment will be JP¥26.50 per share, on the back of last year when the company paid a total of JP¥53.50 to shareholders. Calculating the last year's worth of payments shows that GiXo has a trailing yield of 5.8% on the current share price of JP¥916.00. If you buy this business for its dividend, you should have an idea of whether GiXo'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.

See our latest analysis for GiXo

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. GiXo reported a loss last year, so it's not great to see that it has continued paying a dividend.

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

Have Earnings And Dividends Been Growing?

Companies with falling earnings are riskier for dividend shareholders. If earnings fall far enough, the company could be forced to cut its dividend.

Unfortunately GiXo has only been paying a dividend for a year or so, so there's not much of a history to draw insight from.

Remember, you can always get a snapshot of GiXo's financial health, by checking our visualisation of its financial health, here.

The Bottom Line

Is GiXo an attractive dividend stock, or better left on the shelf? These characteristics don't generally lead to outstanding dividend performance, and investors may not be happy with the results of owning this stock for its dividend.

Having said that, if you're looking at this stock without much concern for the dividend, you should still be familiar of the risks involved with GiXo. We've identified 3 warning signs with GiXo (at least 1 which shouldn't be ignored), and understanding them should be part of your investment process.

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.