Yahoo Finance IGM Financial Inc. (TSE:IGM) Stock Goes Ex-Dividend In Just Four Days
Readers hoping to buy IGM Financial Inc. (TSE:IGM) for its dividend will need to make their move shortly, as the stock is about to trade ex-dividend. The ex-dividend date is one business day before the record date, which is the cut-off date for shareholders to be present on the company's books to be eligible for a dividend payment. The ex-dividend date is an important date to be aware of as any purchase of the stock made on or after this date might mean a late settlement that doesn't show on the record date. In other words, investors can purchase IGM Financial's shares before the 28th of June in order to be eligible for the dividend, which will be paid on the 31st of July.
The company's upcoming dividend is CA$0.5625 a share, following on from the last 12 months, when the company distributed a total of CA$2.25 per share to shareholders. Based on the last year's worth of payments, IGM Financial has a trailing yield of 5.9% on the current stock price of CA$38.22. If you buy this business for its dividend, you should have an idea of whether IGM Financial's dividend is reliable and sustainable. So we need to investigate whether IGM Financial can afford its dividend, and if the dividend could grow.
Check out our latest analysis for IGM Financial
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. IGM Financial paid out more than half (69%) of its earnings last year, which is a regular payout ratio for most companies.
Generally speaking, the lower a company's payout ratios, the more resilient its dividend usually is.
Click here to see the company's payout ratio, plus analyst estimates of its future dividends.
Have Earnings And Dividends Been Growing?
Stocks with flat earnings can still be attractive dividend payers, but it is important to be more conservative with your approach and demand a greater margin for safety when it comes to dividend sustainability. If earnings fall far enough, the company could be forced to cut its dividend. That explains why we're not overly excited about IGM Financial's flat earnings over the past five years. We'd take that over an earnings decline any day, but in the long run, the best dividend stocks all grow their earnings per share.
The main way most investors will assess a company's dividend prospects is by checking the historical rate of dividend growth. It looks like the IGM Financial dividends are largely the same as they were 10 years ago.
The Bottom Line
Should investors buy IGM Financial for the upcoming dividend? IGM Financial's earnings are effectively flat over recent years, even as the company pays out more than half of its earnings to shareholders as dividends. It doesn't appear an outstanding opportunity, but could be worth a closer look.
Wondering what the future holds for IGM Financial? See what the six analysts we track are forecasting, with this visualisation of its historical and future estimated earnings and cash flow
If you're in the market for strong dividend payers, we recommend checking our selection of top 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.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com
