Yamano Holdings Corporation (TSE:7571) Goes Ex-Dividend Soon

Regular readers will know that we love our dividends at Simply Wall St, which is why it's exciting to see Yamano Holdings Corporation (TSE:7571) is about to trade ex-dividend in the next 3 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 of consequence because whenever a stock is bought or sold, the trade can take two business days or more to settle. This means that investors who purchase Yamano Holdings' shares on or after the 28th of March will not receive the dividend, which will be paid on the 1st of January.

The company's next dividend payment will be JP¥1.00 per share. Last year, in total, the company distributed JP¥1.00 to shareholders. Calculating the last year's worth of payments shows that Yamano Holdings has a trailing yield of 1.5% on the current share price of JP¥65.00. 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 investigate whether Yamano Holdings can afford its dividend, and if the dividend could grow.

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. Yamano Holdings is paying out an acceptable 62% of its profit, a common payout level among most companies. Considering the lack of profitability, we also need to check if the company generated enough cash flow to cover the dividend payment. If cash earnings don't cover the dividend, the company would have to pay dividends out of cash in the bank, or by borrowing money, neither of which is long-term sustainable. Dividends consumed 69% of the company's free cash flow last year, which is within a normal range for most dividend-paying organisations.

View our latest analysis for Yamano Holdings

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

Have Earnings And Dividends Been Growing?

Stocks in companies that generate sustainable earnings growth often make the best dividend prospects, as it is easier to lift the dividend when earnings are rising. If business enters a downturn and the dividend is cut, the company could see its value fall precipitously. Yamano Holdings was unprofitable last year, but at least the general trend suggests its earnings have been improving over the past five years. Even so, an unprofitable company whose business does not quickly recover is usually not a good candidate for dividend investors.

Many investors will assess a company's dividend performance by evaluating how much the dividend payments have changed over time. Yamano Holdings's dividend payments per share have declined at 6.7% per year on average over the past 10 years, which is uninspiring.

We update our analysis on Yamano Holdings every 24 hours, so you can always get the latest insights on its financial health, here.

The Bottom Line

Is Yamano Holdings an attractive dividend stock, or better left on the shelf? It's hard to get used to Yamano Holdings paying a dividend despite reporting a loss over the past year. At least the dividend was covered by free cash flow, however. In summary, it's hard to get excited about Yamano Holdings from a dividend perspective.

With that in mind, a critical part of thorough stock research is being aware of any risks that stock currently faces. Our analysis shows 1 warning sign for Yamano Holdings and you should be aware of it before buying any shares.

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.