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Do These 3 Checks Before Buying ATN International, Inc. (NASDAQ:ATNI) For Its Upcoming Dividend

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Simply Wall St
·4 min read
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Regular readers will know that we love our dividends at Simply Wall St, which is why it's exciting to see ATN International, Inc. (NASDAQ:ATNI) is about to trade ex-dividend in the next 4 days. This means that investors who purchase shares on or after the 29th of September will not receive the dividend, which will be paid on the 9th of October.

ATN International's next dividend payment will be US$0.17 per share, and in the last 12 months, the company paid a total of US$0.68 per share. Based on the last year's worth of payments, ATN International has a trailing yield of 1.4% on the current stock price of $48.36. Dividends are an important source of income to many shareholders, but the health of the business is crucial to maintaining those dividends. As a result, readers should always check whether ATN International has been able to grow its dividends, or if the dividend might be cut.

See our latest analysis for ATN International

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. ATN International's dividend is not well covered by earnings, as the company lost money last year. This is not a sustainable state of affairs, so it would be worth investigating if earnings are expected to recover. With the recent loss, it's important to check if the business generated enough cash to pay its dividend. If ATN International didn't generate enough cash to pay the dividend, then it must have either paid from cash in the bank or by borrowing money, neither of which is sustainable in the long term. It paid out more than half (53%) of its free cash flow in the past year, which is within an average range for most companies.

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

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historic-dividend

Have Earnings And Dividends Been Growing?

When earnings decline, dividend companies become much harder to analyse and own safely. If earnings decline and the company is forced to cut its dividend, investors could watch the value of their investment go up in smoke. ATN International reported a loss last year, and the general trend suggests its earnings have also been declining in recent years, making us wonder if the dividend is at risk.

Many investors will assess a company's dividend performance by evaluating how much the dividend payments have changed over time. ATN International's dividend payments per share have declined at 1.6% per year on average over the past 10 years, which is uninspiring.

Get our latest analysis on ATN International's balance sheet health here.

Final Takeaway

Is ATN International worth buying for its dividend? We're a bit uncomfortable with it paying a dividend while being loss-making. However, we note that the dividend was covered by cash flow. With the way things are shaping up from a dividend perspective, we'd be inclined to steer clear of ATN International.

With that in mind though, if the poor dividend characteristics of ATN International don't faze you, it's worth being mindful of the risks involved with this business. For example, we've found 3 warning signs for ATN International (1 is a bit concerning!) that deserve your attention before investing in the shares.

A common investment mistake is buying the first interesting stock you see. Here you can find a list of promising dividend stocks with a greater than 2% yield and an upcoming dividend.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com.