Guardian Capital Group Limited (TSE:GCG.A) is about to trade ex-dividend in the next 4 days. This means that investors who purchase shares on or after the 8th of October will not receive the dividend, which will be paid on the 19th of October.
Guardian Capital Group's next dividend payment will be CA$0.16 per share. Last year, in total, the company distributed CA$0.64 to shareholders. Based on the last year's worth of payments, Guardian Capital Group has a trailing yield of 2.7% on the current stock price of CA$24. If you buy this business for its dividend, you should have an idea of whether Guardian Capital Group's dividend is reliable and sustainable. So we need to investigate whether Guardian Capital Group can afford its dividend, and if the dividend could grow.
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. Guardian Capital Group'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.
Have Earnings And Dividends Been Growing?
Companies with falling earnings are riskier for dividend shareholders. If earnings fall far enough, the company could be forced to cut its dividend. Guardian Capital Group 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. Since the start of our data, 10 years ago, Guardian Capital Group has lifted its dividend by approximately 16% a year on average.
To Sum It Up
Is Guardian Capital Group an attractive dividend stock, or better left on the shelf? 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. Guardian Capital Group 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.
Having said that, if you're looking at this stock without much concern for the dividend, you should still be familiar of the risks involved with Guardian Capital Group. To help with this, we've discovered 2 warning signs for Guardian Capital Group (1 is significant!) that you ought to be aware of before buying the shares.
If you're in the market for dividend stocks, we recommend checking our list of top 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.
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