Vodafone Qatar P.Q.S.C. (DSM:VFQS) Goes Ex-Dividend Soon

It looks like Vodafone Qatar P.Q.S.C. (DSM:VFQS) is about to go ex-dividend in the next 4 days. The ex-dividend date is one business day before a company's record date, which is the date on which the company determines which shareholders are entitled to receive a dividend. The ex-dividend date is important as the process of settlement involves two full business days. So if you miss that date, you would not show up on the company's books on the record date. Meaning, you will need to purchase Vodafone Qatar P.Q.S.C's shares before the 25th of February to receive the dividend, which will be paid on the 1st of January.

The company's upcoming dividend is ر.ق0.12 a share, following on from the last 12 months, when the company distributed a total of ر.ق0.12 per share to shareholders. Calculating the last year's worth of payments shows that Vodafone Qatar P.Q.S.C has a trailing yield of 5.8% on the current share price of ر.ق2.062. 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.

View our latest analysis for Vodafone Qatar P.Q.S.C

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. Its dividend payout ratio is 84% of profit, which means the company is paying out a majority of its earnings. The relatively limited profit reinvestment could slow the rate of future earnings growth. It could become a concern if earnings started to decline. That said, even highly profitable companies sometimes might not generate enough cash to pay the dividend, which is why we should always check if the dividend is covered by cash flow. Dividends consumed 72% of the company's free cash flow last year, which is within a normal range for most dividend-paying organisations.

It's positive to see that Vodafone Qatar P.Q.S.C'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 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. It's encouraging to see Vodafone Qatar P.Q.S.C has grown its earnings rapidly, up 33% a year for the past five years. The company is paying out more than three-quarters of its earnings, but it is also generating strong earnings growth.

The main way most investors will assess a company's dividend prospects is by checking the historical rate of dividend growth. In the past 10 years, Vodafone Qatar P.Q.S.C has increased its dividend at approximately 13% 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.

To Sum It Up

Has Vodafone Qatar P.Q.S.C got what it takes to maintain its dividend payments? It's good to see earnings are growing, since all of the best dividend stocks grow their earnings meaningfully over the long run. That's why we're glad to see Vodafone Qatar P.Q.S.C's earnings per share growing, although as we saw, the company is paying out more than half of its earnings and cashflow - 84% and 72% respectively. All things considered, we are not particularly enthused about Vodafone Qatar P.Q.S.C from a dividend perspective.

In light of that, while Vodafone Qatar P.Q.S.C has an appealing dividend, it's worth knowing the risks involved with this stock. For example, we've found 1 warning sign for Vodafone Qatar P.Q.S.C that we recommend you consider before investing in the business.

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.