It Might Not Be A Great Idea To Buy Perella Weinberg Partners (NASDAQ:PWP) For Its Next Dividend
Perella Weinberg Partners (NASDAQ:PWP) is about to trade ex-dividend in the next four days. Typically, the ex-dividend date is one business day before the record date which is the date on which a company determines the shareholders eligible to receive a dividend. It is important to be aware of the ex-dividend date because any trade on the stock needs to have been settled on or before the record date. Therefore, if you purchase Perella Weinberg Partners' shares on or after the 22nd of November, you won't be eligible to receive the dividend, when it is paid on the 8th of December.
The company's upcoming dividend is US$0.07 a share, following on from the last 12 months, when the company distributed a total of US$0.28 per share to shareholders. Looking at the last 12 months of distributions, Perella Weinberg Partners has a trailing yield of approximately 2.6% on its current stock price of $10.88. Dividends are a major contributor to investment returns for long term holders, but only if the dividend continues to be paid. So we need to check whether the dividend payments are covered, and if earnings are growing.
Check out our latest analysis for Perella Weinberg Partners
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. Perella Weinberg Partners reported a loss after tax last year, which means it's paying a dividend despite being unprofitable. While this might be a one-off event, this is unlikely to be sustainable in the long term.
Click here to see the company's payout ratio, plus analyst estimates of its future dividends.
Have Earnings And Dividends Been Growing?
When earnings decline, dividend companies become much harder to analyse and own safely. If business enters a downturn and the dividend is cut, the company could see its value fall precipitously. Perella Weinberg Partners was unprofitable last year, and sadly its loss per share worsened by 145% on the previous year.
Another key way to measure a company's dividend prospects is by measuring its historical rate of dividend growth. Perella Weinberg Partners's dividend payments are broadly unchanged compared to where they were two years ago. When earnings are declining yet the dividends are flat, typically the company is either paying out a higher portion of its earnings, or paying out of cash or debt on the balance sheet, neither of which is ideal.
Remember, you can always get a snapshot of Perella Weinberg Partners's financial health, by checking our visualisation of its financial health, here.
The Bottom Line
Should investors buy Perella Weinberg Partners for the upcoming dividend? It's definitely not great to see that it paid a dividend despite reporting a loss last year. Worse, the general trend in its earnings looks negative in recent times. These characteristics don't generally lead to outstanding dividend performance, and investors may not be happy with the results of owning this stock for its dividend.
Although, if you're still interested in Perella Weinberg Partners and want to know more, you'll find it very useful to know what risks this stock faces. For example - Perella Weinberg Partners has 1 warning sign we think you should be aware of.
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.
