Why You Might Be Interested In Ooredoo Q.P.S.C. (DSM:ORDS) For Its Upcoming Dividend

Ooredoo Q.P.S.C. (DSM:ORDS) stock is about to trade ex-dividend in 4 days. The ex-dividend date generally occurs two days 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 important because any transaction on a stock needs to have been settled before the record date in order to be eligible for a dividend. Therefore, if you purchase Ooredoo Q.P.S.C's shares on or after the 12th of March, you won't be eligible to receive the dividend, when it is paid on the 1st of January.

The company's next dividend payment will be ر.ق0.65 per share. Last year, in total, the company distributed ر.ق0.65 to shareholders. Looking at the last 12 months of distributions, Ooredoo Q.P.S.C has a trailing yield of approximately 5.2% on its current stock price of ر.ق12.60. We love seeing companies pay a dividend, but it's also important to be sure that laying the golden eggs isn't going to kill our golden goose! That's why we should always check whether the dividend payments appear sustainable, and if the company is growing.

Check out our latest analysis for Ooredoo Q.P.S.C

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. Ooredoo Q.P.S.C is paying out an acceptable 61% of its profit, a common payout level among most companies. 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. Thankfully its dividend payments took up just 37% of the free cash flow it generated, which is a comfortable payout ratio.

It's encouraging to see that the dividend is covered by both profit and cash flow. This generally suggests the dividend is sustainable, as long as earnings don't drop precipitously.

Click here to see the company's payout ratio, plus analyst estimates of its future dividends.

Have Earnings And Dividends Been Growing?

Businesses with strong growth prospects usually make the best dividend payers, because it's easier to grow dividends when earnings per share are improving. If earnings fall far enough, the company could be forced to cut its dividend. For this reason, we're glad to see Ooredoo Q.P.S.C's earnings per share have risen 15% per annum over the last five years. Ooredoo Q.P.S.C has an average payout ratio which suggests a balance between growing earnings and rewarding shareholders. This is a reasonable combination that could hint at some further dividend increases in the future.

Many investors will assess a company's dividend performance by evaluating how much the dividend payments have changed over time. Ooredoo Q.P.S.C has delivered 5.0% dividend growth per year on average over the past 10 years. Earnings per share have been growing much quicker than dividends, potentially because Ooredoo Q.P.S.C is keeping back more of its profits to grow the business.

To Sum It Up

From a dividend perspective, should investors buy or avoid Ooredoo Q.P.S.C? Ooredoo Q.P.S.C's growing earnings per share and conservative payout ratios make for a decent combination. We also like that it paid out a lower percentage of its cash flow. There's a lot to like about Ooredoo Q.P.S.C, and we would prioritise taking a closer look at it.

So while Ooredoo Q.P.S.C looks good from a dividend perspective, it's always worthwhile being up to date with the risks involved in this stock. Every company has risks, and we've spotted 1 warning sign for Ooredoo Q.P.S.C you should know about.

A common investing mistake is buying the first interesting stock you see. Here you can find a full list of high-yield 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.