Should Income Investors Look At Urban Exposure Plc (LON:UEX) Before Its Ex-Dividend?
Readers hoping to buy Urban Exposure Plc (LON:UEX) for its dividend will need to make their move shortly, as the stock is about to trade ex-dividend. This means that investors who purchase shares on or after the 26th of September will not receive the dividend, which will be paid on the 18th of October.
Urban Exposure's upcoming dividend is UK£0.02 a share, following on from the last 12 months, when the company distributed a total of UK£0.03 per share to shareholders. Based on the last year's worth of payments, Urban Exposure has a trailing yield of 8.2% on the current stock price of £0.61. Dividends are an important source of income to many shareholders, but the health of the business is crucial to maintaining those dividends. So we need to investigate whether Urban Exposure can afford its dividend, and if the dividend could grow.
Check out our latest analysis for Urban Exposure
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. Urban Exposure'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.
Click here to see the company's payout ratio, plus analyst estimates of its future dividends.
Have Earnings And Dividends Been Growing?
Companies that aren't growing their earnings can still be valuable, but it is even more important to assess the sustainability of the dividend if it looks like the company will struggle to grow. If earnings decline and the company is forced to cut its dividend, investors could watch the value of their investment go up in smoke.
Urban Exposure also issued more than 5% of its market cap in new stock during the past year, which we feel is likely to hurt its dividend prospects in the long run. It's hard to grow dividends per share when a company keeps creating new shares.
Given that Urban Exposure has only been paying a dividend for a year, there's not much of a past history to draw insight from.
We update our analysis on Urban Exposure every 24 hours, so you can always get the latest insights on its financial health, here.
Final Takeaway
Has Urban Exposure got what it takes to maintain its dividend payments? It's hard to get past the idea of Urban Exposure paying a dividend despite reporting a loss over the past year - especially when the general trend in its earnings also looks to be negative. This is not an overtly appealing combination of characteristics, and we're just not that interested in this company's dividend.
Ever wonder what the future holds for Urban Exposure? See what the two analysts we track are forecasting, with this visualisation of its historical and future estimated earnings and cash flow
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.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.
