U.S. markets closed

There's A Lot To Like About Dundee Precious Metals Inc.'s (TSE:DPM) Upcoming US$0.02 Dividend

Simply Wall St

Some investors rely on dividends for growing their wealth, and if you're one of those dividend sleuths, you might be intrigued to know that Dundee Precious Metals Inc. (TSE:DPM) is about to go ex-dividend in just 3 days. Ex-dividend means that investors that purchase the stock on or after the 30th of March will not receive this dividend, which will be paid on the 15th of April.

Dundee Precious Metals's next dividend payment will be CA$0.02 per share, on the back of last year when the company paid a total of CA$0.08 to shareholders. Calculating the last year's worth of payments shows that Dundee Precious Metals has a trailing yield of 2.3% on the current share price of CA$5. 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 Dundee Precious Metals can afford its dividend, and if the dividend could grow.

View our latest analysis for Dundee Precious Metals

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.

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

TSX:DPM Historical Dividend Yield March 26th 2020

Have Earnings And Dividends Been Growing?

Companies with consistently growing earnings per share generally make the best dividend stocks, as they usually find it easier to grow dividends per share. Investors love dividends, so if earnings fall and the dividend is reduced, expect a stock to be sold off heavily at the same time. Dundee Precious Metals was unprofitable last year, but at least the general trend suggests its earnings have been improving over the past five years. Even so, an unprofitable company whose business does not quickly recover is usually not a good candidate for dividend investors.

This is Dundee Precious Metals's first year of paying a dividend, so it doesn't have much of a history yet to compare to.

Remember, you can always get a snapshot of Dundee Precious Metals's financial health, by checking our visualisation of its financial health, here.

Final Takeaway

Should investors buy Dundee Precious Metals for the upcoming dividend? Dundee Precious Metals ticks a lot of boxes for us from a dividend perspective, and we think these characteristics should mark the company as deserving of further attention.

With that in mind, a critical part of thorough stock research is being aware of any risks that stock currently faces. Case in point: We've spotted 1 warning sign for Dundee Precious Metals you should be aware of.

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.

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.

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. Thank you for reading.