Do These 3 Checks Before Buying U.S. Global Investors, Inc. (NASDAQ:GROW) For Its Upcoming Dividend

Readers hoping to buy U.S. Global Investors, Inc. (NASDAQ:GROW) for its dividend will need to make their move shortly, as the stock is about to trade ex-dividend. The ex-dividend date occurs one day 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. It is important to be aware of the ex-dividend date because any trade on the stock needs to have been settled on or before the record date. Accordingly, U.S. Global Investors investors that purchase the stock on or after the 10th of November will not receive the dividend, which will be paid on the 24th of November.

The company's next dividend payment will be US$0.0075 per share. Last year, in total, the company distributed US$0.09 to shareholders. Based on the last year's worth of payments, U.S. Global Investors stock has a trailing yield of around 3.7% on the current share price of US$2.42. If you buy this business for its dividend, you should have an idea of whether U.S. Global Investors's dividend is reliable and sustainable. So we need to investigate whether U.S. Global Investors can afford its dividend, and if the dividend could grow.

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

See our latest analysis for U.S. Global Investors

Click here to see how much of its profit U.S. Global Investors paid out over the last 12 months.

Have Earnings And Dividends Been Growing?

Businesses with shrinking earnings are tricky from a dividend perspective. Investors love dividends, so if earnings fall and the dividend is reduced, expect a stock to be sold off heavily at the same time. U.S. Global Investors was unprofitable last year and, unfortunately, the general trend suggests its earnings have been in decline over the last five years, making us wonder if the dividend is sustainable at all.

Many investors will assess a company's dividend performance by evaluating how much the dividend payments have changed over time. U.S. Global Investors has delivered 4.1% dividend growth per year on average over the past 10 years.

We update our analysis on U.S. Global Investors every 24 hours, so you can always get the latest insights on its financial health, here.

The Bottom Line

From a dividend perspective, should investors buy or avoid U.S. Global Investors? First, it's not great to see the company paying a dividend despite being loss-making over the last year. Worse, the general trend in its earnings looks negative in recent years. U.S. Global Investors doesn't appear to have a lot going for it, and we're not inclined to take a risk on owning it for the dividend.

With that being said, if you're still considering U.S. Global Investors as an investment, you'll find it beneficial to know what risks this stock is facing. For example, U.S. Global Investors has 3 warning signs (and 2 which are a bit concerning) we think you should know about.

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.