It looks like Fiducian Group Limited (ASX:FID) is about to go ex-dividend in the next 4 days. Typically, the ex-dividend date is one business day before the record date which is the date on which a company determines the shareholders eligible to receive a dividend. The ex-dividend date is important because any transaction on a stock needs to have been settled before the record date in order to be eligible for a dividend. Accordingly, Fiducian Group investors that purchase the stock on or after the 27th of August will not receive the dividend, which will be paid on the 13th of September.

The company's next dividend payment will be AU$0.15 per share. Last year, in total, the company distributed AU$0.29 to shareholders. Calculating the last year's worth of payments shows that Fiducian Group has a trailing yield of 3.5% on the current share price of A$8.45. Dividends are an important source of income to many shareholders, but the health of the business is crucial to maintaining those dividends. So we need to investigate whether Fiducian Group can afford its dividend, and if the dividend could grow.

Check out our latest analysis for Fiducian Group

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. Fiducian Group 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 how much of its profit Fiducian Group paid out over the last 12 months. historic-dividend

Have Earnings And Dividends Been Growing?

Stocks in companies that generate sustainable earnings growth often make the best dividend prospects, as it is easier to lift the dividend when earnings are rising. Investors love dividends, so if earnings fall and the dividend is reduced, expect a stock to be sold off heavily at the same time. Fortunately for readers, Fiducian Group's earnings per share have been growing at 16% a year for the past five years.



The main way most investors will assess a company's dividend prospects is by checking the historical rate of dividend growth. In the past 10 years, Fiducian Group has increased its dividend at approximately 13% a year on average. It's great to see earnings per share growing rapidly over several years, and dividends per share growing right along with it.

The Bottom Line

Is Fiducian Group an attractive dividend stock, or better left on the shelf? Fiducian Group has an acceptable payout ratio and its earnings per share have been improving at a decent rate. Fiducian Group ticks a lot of boxes for us from a dividend perspective, and we think these characteristics should mark the company as deserving of further attention.

In light of that, while Fiducian Group has an appealing dividend, it's worth knowing the risks involved with this stock. To help with this, we've discovered 1 warning sign for Fiducian Group that you should be aware of before investing in their 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. 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.

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