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We Wouldn't Be Too Quick To Buy Microequities Asset Management Group Limited (ASX:MAM) Before It Goes Ex-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 Microequities Asset Management Group Limited (ASX:MAM) is about to go ex-dividend in just 2 days. If you purchase the stock on or after the 20th of August, you won't be eligible to receive this dividend, when it is paid on the 5th of September.

Microequities Asset Management Group's next dividend payment will be AU$0.01 per share. Last year, in total, the company distributed AU$0.02 to shareholders. Calculating the last year's worth of payments shows that Microequities Asset Management Group has a trailing yield of 6.3% on the current share price of A$0.32. We love seeing companies pay a dividend, but it's also important to be sure that laying the golden eggs isn't going to kill our golden goose! As a result, readers should always check whether Microequities Asset Management Group has been able to grow its dividends, or if the dividend might be cut.

Check out our latest analysis for Microequities Asset Management Group

If a company pays out more in dividends than it earned, then the dividend might become unsustainable - hardly an ideal situation. Microequities Asset Management Group is paying out an acceptable 75% of its profit, a common payout level among most companies.

Companies that pay out less in dividends than they earn in profits generally have more sustainable dividends. The lower the payout ratio, the more wiggle room the business has before it could be forced to cut the dividend.

Click here to see how much of its profit Microequities Asset Management Group paid out over the last 12 months.

ASX:MAM Historical Dividend Yield, August 17th 2019

Have Earnings And Dividends Been Growing?

Companies with falling earnings are riskier for dividend shareholders. If earnings decline and the company is forced to cut its dividend, investors could watch the value of their investment go up in smoke. From this perspective, we're disturbed to see earnings per share plunged 52% over the last 12 months, and we'd wonder if the company has had some kind of major event that has skewed the calculation.

Given that Microequities Asset Management Group has only been paying a dividend for a year, there's not much of a past history to draw insight from.

To Sum It Up

Is Microequities Asset Management Group worth buying for its dividend? We're not overly enthused to see Microequities Asset Management Group's earnings in retreat at the same time as the company is paying out more than half of its earnings as dividends to shareholders. Microequities Asset Management 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.

Curious about whether Microequities Asset Management Group has been able to consistently generate growth? Here's a chart of its historical revenue and earnings growth.

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.

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.