Only Four Days Left To Cash In On Loop Telecommunication InternationalInc's (TWSE:3025) Dividend

Regular readers will know that we love our dividends at Simply Wall St, which is why it's exciting to see Loop Telecommunication International,Inc. (TWSE:3025) is about to trade ex-dividend in the next four days. Typically, the ex-dividend date is one business day before the record date which is the date on which a company determines the shareholders eligible 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. This means that investors who purchase Loop Telecommunication InternationalInc's shares on or after the 27th of August will not receive the dividend, which will be paid on the 20th of September.

The company's next dividend payment will be NT$3.20 per share. Last year, in total, the company distributed NT$3.20 to shareholders. Last year's total dividend payments show that Loop Telecommunication InternationalInc has a trailing yield of 4.8% on the current share price of NT$66.00. If you buy this business for its dividend, you should have an idea of whether Loop Telecommunication InternationalInc's dividend is reliable and sustainable. We need to see whether the dividend is covered by earnings and if it's growing.

Check out our latest analysis for Loop Telecommunication InternationalInc

Dividends are typically paid from company earnings. If a company pays more in dividends than it earned in profit, then the dividend could be unsustainable. Last year Loop Telecommunication InternationalInc paid out 98% of its profits as dividends to shareholders, suggesting the dividend is not well covered by earnings. Yet cash flow is typically more important than profit for assessing dividend sustainability, so we should always check if the company generated enough cash to afford its dividend. Thankfully its dividend payments took up just 45% of the free cash flow it generated, which is a comfortable payout ratio.

It's good to see that while Loop Telecommunication InternationalInc's dividends were not well covered by profits, at least they are affordable from a cash perspective. Still, if this were to happen repeatedly, we'd be concerned about whether the dividend is sustainable in a downturn.

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

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. That's why it's comforting to see Loop Telecommunication InternationalInc's earnings have been skyrocketing, up 179% per annum for the past five years.

Many investors will assess a company's dividend performance by evaluating how much the dividend payments have changed over time. In the past 10 years, Loop Telecommunication InternationalInc has increased its dividend at approximately 27% 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

Is Loop Telecommunication InternationalInc an attractive dividend stock, or better left on the shelf? Earnings per share have been rising nicely although, even though its cashflow payout ratio is low, we question why Loop Telecommunication InternationalInc is paying out so much of its profit. While it does have some good things going for it, we're a bit ambivalent and it would take more to convince us of Loop Telecommunication InternationalInc's dividend merits.

While it's tempting to invest in Loop Telecommunication InternationalInc for the dividends alone, you should always be mindful of the risks involved. For example, we've found 1 warning sign for Loop Telecommunication InternationalInc that we recommend you consider before investing in the business.

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.