Interested In Ares Management's (NYSE:ARES) Upcoming US$0.93 Dividend? You Have Three Days Left

Some investors rely on dividends for growing their wealth, and if you're one of those dividend sleuths, you might be intrigued to know that Ares Management Corporation (NYSE:ARES) is about to go ex-dividend in just three days. The ex-dividend date is usually set to be one business day 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 an important date to be aware of as any purchase of the stock made on or after this date might mean a late settlement that doesn't show on the record date. Thus, you can purchase Ares Management's shares before the 17th of December in order to receive the dividend, which the company will pay on the 31st of December.

The company's next dividend payment will be US$0.93 per share. Last year, in total, the company distributed US$3.72 to shareholders. Last year's total dividend payments show that Ares Management has a trailing yield of 2.0% on the current share price of US$182.74. If you buy this business for its dividend, you should have an idea of whether Ares Management's dividend is reliable and sustainable. So we need to investigate whether Ares Management can afford its dividend, and if the dividend could grow.

Check out our latest analysis for Ares Management

If a company pays out more in dividends than it earned, then the dividend might become unsustainable - hardly an ideal situation. Ares Management distributed an unsustainably high 160% of its profit as dividends to shareholders last year. Without extenuating circumstances, we'd consider the dividend at risk of a cut.

Generally, the higher a company's payout ratio, the more the dividend is at risk of being reduced.

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

Have Earnings And Dividends Been Growing?

Companies with consistently growing earnings per share generally make the best dividend stocks, as they usually find it easier to grow dividends per share. Investors love dividends, so if earnings fall and the dividend is reduced, expect a stock to be sold off heavily at the same time. It's encouraging to see Ares Management has grown its earnings rapidly, up 49% a year for the past five years.

The main way most investors will assess a company's dividend prospects is by checking the historical rate of dividend growth. Ares Management has delivered 18% dividend growth per year on average over the past 10 years. It's exciting to see that both earnings and dividends per share have grown rapidly over the past few years.

The Bottom Line

Is Ares Management worth buying for its dividend? We're not enthused to see Ares Management's dividend was not well covered by earnings over the last year, although it is great to see earnings growing. We think there are likely better opportunities out there.

However if you're still interested in Ares Management as a potential investment, you should definitely consider some of the risks involved with Ares Management. Our analysis shows 3 warning signs for Ares Management that we strongly recommend you have a look at before investing in the company.

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.