It looks like Piper Sandler Companies (NYSE:PIPR) is about to go ex-dividend in the next four days. Ex-dividend means that investors that purchase the stock on or after the 2nd of March will not receive this dividend, which will be paid on the 12th of March.
Piper Sandler Companies's next dividend payment will be US$2.25 per share, and in the last 12 months, the company paid a total of US$3.13 per share. Last year's total dividend payments show that Piper Sandler Companies has a trailing yield of 2.9% on the current share price of $108.67. Dividends are an important source of income to many shareholders, but the health of the business is crucial to maintaining those dividends. That's why we should always check whether the dividend payments appear sustainable, and if the company is growing.
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. Fortunately Piper Sandler Companies's payout ratio is modest, at just 43% of profit.
Generally speaking, the lower a company's payout ratios, the more resilient its dividend usually is.
Have Earnings And Dividends Been Growing?
Businesses with shrinking earnings are tricky from a dividend perspective. If business enters a downturn and the dividend is cut, the company could see its value fall precipitously. So we're not too excited that Piper Sandler Companies's earnings are down 2.6% a year over the past five years.
Many investors will assess a company's dividend performance by evaluating how much the dividend payments have changed over time. Piper Sandler Companies has delivered 26% dividend growth per year on average over the past four years.
The Bottom Line
Is Piper Sandler Companies an attractive dividend stock, or better left on the shelf? Piper Sandler Companies's earnings per share are down over the past five years, although it has the cushion of a low payout ratio, which would suggest a cut to the dividend is relatively unlikely. We're unconvinced on the company's merits, and think there might be better opportunities out there.
If you're not too concerned about Piper Sandler Companies's ability to pay dividends, you should still be mindful of some of the other risks that this business faces. Our analysis shows 3 warning signs for Piper Sandler Companies and you should be aware of them before buying any shares.
We wouldn't recommend just buying the first dividend stock you see, though. Here's a list of interesting dividend stocks with a greater than 2% yield and an upcoming dividend.
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This article by Simply Wall St is general in nature. 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.
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