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Wynnstay Group Plc (LON:WYN) Goes Ex-Dividend Soon

Simply Wall St
·3 mins read

Wynnstay Group Plc (LON:WYN) stock is about to trade ex-dividend in three days. You can purchase shares before the 24th of September in order to receive the dividend, which the company will pay on the 30th of October.

Wynnstay Group's next dividend payment will be UK£0.046 per share. Last year, in total, the company distributed UK£0.14 to shareholders. Based on the last year's worth of payments, Wynnstay Group has a trailing yield of 4.2% on the current stock price of £3.3. Dividends are an important source of income to many shareholders, but the health of the business is crucial to maintaining those dividends. We need to see whether the dividend is covered by earnings and if it's growing.

See our latest analysis for Wynnstay Group

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. That's why it's good to see Wynnstay Group paying out a modest 45% of its earnings. Yet cash flows are even more important than profits for assessing a dividend, so we need to see if the company generated enough cash to pay its distribution. Luckily it paid out just 15% of its free cash flow last year.

It's positive to see that Wynnstay Group's dividend is covered by both profits and cash flow, since this is generally a sign that the dividend is sustainable, and a lower payout ratio usually suggests a greater margin of safety before the dividend gets cut.

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. If earnings fall far enough, the company could be forced to cut its dividend. That's why it's not ideal to see Wynnstay Group's earnings per share have been shrinking at 2.3% a year over the previous five years.

Many investors will assess a company's dividend performance by evaluating how much the dividend payments have changed over time. Wynnstay Group has delivered an average of 8.0% per year annual increase in its dividend, based on the past 10 years of dividend payments.

To Sum It Up

Is Wynnstay Group worth buying for its dividend? Earnings per share are down meaningfully, although at least the company is paying out a low and conservative percentage of both its earnings and cash flow. It's definitely not great to see earnings falling, but at least there may be some buffer before the dividend needs to be cut. Overall, it's not a bad combination, but we feel that there are likely more attractive dividend prospects out there.

While it's tempting to invest in Wynnstay Group for the dividends alone, you should always be mindful of the risks involved. Our analysis shows 1 warning sign for Wynnstay Group and you should be aware of it before buying any shares.

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.

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@simplywallst.com.