It appears like Aptitude Software program Group plc (LON:APTD) is about to go ex-dividend within the subsequent three days. The ex-dividend date is often set to be one enterprise day earlier than the report date which is the deadline on which you have to be current on the corporate’s books as a shareholder as a way to obtain the dividend. The ex-dividend date is essential as a result of any transaction on a inventory must have been settled earlier than the report date as a way to be eligible for a dividend. Which means, you will want to buy Aptitude Software program Group’s shares earlier than the twenty fifth of Might to obtain the dividend, which can be paid on the sixteenth of June.
The corporate’s upcoming dividend is UK£0.036 a share, following on from the final 12 months, when the corporate distributed a complete of UK£0.054 per share to shareholders. Wanting on the final 12 months of distributions, Aptitude Software program Group has a trailing yield of roughly 1.6% on its present inventory value of £3.43. We love seeing firms pay a dividend, however it’s additionally essential to ensure that laying the golden eggs is not going to kill our golden goose! So we have to verify whether or not the dividend funds are lined, and if earnings are rising.
Try our newest evaluation for Aptitude Software program Group
Dividends are usually paid out of firm earnings, so if an organization pays out greater than it earned, its dividend is often at the next danger of being reduce. Aptitude Software program Group distributed an unsustainably excessive 119% of its revenue as dividends to shareholders final 12 months. With out extra sustainable cost behaviour, the dividend appears precarious. That stated, even extremely worthwhile firms typically won’t generate sufficient money to pay the dividend, which is why we must always at all times verify if the dividend is roofed by money move. Aptitude Software program Group paid out extra free money move than it generated – 132%, to be exact – final 12 months, which we predict is concerningly excessive. It is arduous to constantly pay out additional cash than you generate with out both borrowing or utilizing firm money, so we would surprise how the corporate justifies this payout degree.
Money is barely extra essential than revenue from a dividend perspective, however given Aptitude Software program Group’s payouts weren’t properly lined by both earnings or money move, we might be involved concerning the sustainability of this dividend.
Click on right here to see the corporate’s payout ratio, plus analyst estimates of its future dividends.
Have Earnings And Dividends Been Rising?
When earnings decline, dividend firms turn into a lot more durable to analyse and personal safely. If earnings decline and the corporate is compelled to chop its dividend, buyers may watch the worth of their funding go up in smoke. Readers will perceive then, why we’re involved to see Aptitude Software program Group’s earnings per share have dropped 26% a 12 months over the previous 5 years. In the end, when earnings per share decline, the dimensions of the pie from which dividends might be paid, shrinks.
Many buyers will assess an organization’s dividend efficiency by evaluating how a lot the dividend funds have modified over time. Aptitude Software program Group has seen its dividend decline 8.0% each year on common over the previous 10 years, which isn’t nice to see. It is by no means good to see earnings and dividends falling, however at the least administration has reduce the dividend somewhat than doubtlessly danger the corporate’s well being in an try to take care of it.
Ultimate Takeaway
Is Aptitude Software program Group value shopping for for its dividend? Not solely are earnings per share declining, however Aptitude Software program Group is paying out an uncomfortably excessive share of each its earnings and cashflow to shareholders as dividends. Until there are grounds to imagine a turnaround is imminent, this is among the least enticing dividend shares beneath this evaluation. Backside line: Aptitude Software program Group has some unlucky traits that we predict may result in sub-optimal outcomes for dividend buyers.
With that in thoughts although, if the poor dividend traits of Aptitude Software program Group do not faze you, it is value being conscious of the dangers concerned with this enterprise. For instance – Aptitude Software program Group has 1 warning signal we predict try to be conscious of.
When you’re available in the market for robust dividend payers, we advocate checking our number of high dividend shares.
Valuation is advanced, however we’re serving to make it easy.
Discover out whether or not Aptitude Software program Group is doubtlessly over or undervalued by trying out our complete evaluation, which incorporates honest worth estimates, dangers and warnings, dividends, insider transactions and monetary well being.
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