U.S. markets open in 5 hours 46 minutes
  • S&P Futures

    3,807.75
    -31.25 (-0.81%)
     
  • Dow Futures

    31,374.00
    -91.00 (-0.29%)
     
  • Nasdaq Futures

    12,420.00
    -243.75 (-1.92%)
     
  • Russell 2000 Futures

    2,171.30
    -18.40 (-0.84%)
     
  • Crude Oil

    66.67
    +0.58 (+0.88%)
     
  • Gold

    1,691.60
    -6.90 (-0.41%)
     
  • Silver

    25.38
    +0.09 (+0.35%)
     
  • EUR/USD

    1.1886
    -0.0038 (-0.32%)
     
  • 10-Yr Bond

    1.5540
    0.0000 (0.00%)
     
  • Vix

    27.65
    -0.92 (-3.22%)
     
  • GBP/USD

    1.3818
    -0.0010 (-0.07%)
     
  • USD/JPY

    108.4710
    +0.0890 (+0.08%)
     
  • BTC-USD

    49,770.74
    +197.95 (+0.40%)
     
  • CMC Crypto 200

    1,004.95
    +61.77 (+6.55%)
     
  • FTSE 100

    6,667.60
    +37.08 (+0.56%)
     
  • Nikkei 225

    28,743.25
    -121.07 (-0.42%)
     

We Wouldn't Be Too Quick To Buy Ashland Global Holdings Inc. (NYSE:ASH) Before It Goes Ex-Dividend

  • Oops!
    Something went wrong.
    Please try again later.
Simply Wall St
·3 min read
  • Oops!
    Something went wrong.
    Please try again later.

Ashland Global Holdings Inc. (NYSE:ASH) is about to trade ex-dividend in the next 3 days. You can purchase shares before the 25th of February in order to receive the dividend, which the company will pay on the 15th of March.

Ashland Global Holdings's upcoming dividend is US$0.28 a share, following on from the last 12 months, when the company distributed a total of US$1.10 per share to shareholders. Based on the last year's worth of payments, Ashland Global Holdings stock has a trailing yield of around 1.3% on the current share price of $87.21. Dividends are an important source of income to many shareholders, but the health of the business is crucial to maintaining those dividends. That's why we should always check whether the dividend payments appear sustainable, and if the company is growing.

View our latest analysis for Ashland Global Holdings

Dividends are typically paid out of company income, so if a company pays out more than it earned, its dividend is usually at a higher risk of being cut. Ashland Global Holdings 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. Considering the lack of profitability, we also need to check if the company generated enough cash flow to cover the dividend payment. If cash earnings don't cover the dividend, the company would have to pay dividends out of cash in the bank, or by borrowing money, neither of which is long-term sustainable. It distributed 32% of its free cash flow as dividends, a comfortable payout level for most companies.

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

historic-dividend
historic-dividend

Have Earnings And Dividends Been Growing?

When earnings decline, dividend companies become much harder to analyse and own safely. Investors love dividends, so if earnings fall and the dividend is reduced, expect a stock to be sold off heavily at the same time. Ashland Global Holdings 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. In the past 10 years, Ashland Global Holdings has increased its dividend at approximately 6.2% a year on average.

We update our analysis on Ashland Global Holdings every 24 hours, so you can always get the latest insights on its financial health, here.

To Sum It Up

Is Ashland Global Holdings an attractive dividend stock, or better left on the shelf? It's hard to get used to Ashland Global Holdings paying a dividend despite reporting a loss over the past year. At least the dividend was covered by free cash flow, however. With the way things are shaping up from a dividend perspective, we'd be inclined to steer clear of Ashland Global Holdings.

Ever wonder what the future holds for Ashland Global Holdings? See what the nine analysts we track are forecasting, with this visualisation of its historical and future estimated earnings and cash flow

We wouldn't recommend just buying the first dividend stock you see, though. Here's a list of interesting 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 (at) simplywallst.com.