Readers hoping to buy

UP Global Sourcing Holdings plc

(

LON:UPGS

) for its dividend will need to make their move shortly,payday loans on mansfield rd 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 important as the process of settlement involves two full business days. So if you miss that date, you would not show up on the company's books on the record date. Therefore, if you purchase UP Global Sourcing Holdings' shares on or after the 6th of January, you won't be eligible to receive the dividend, when it is paid on the 28th of January.

The company's upcoming dividend is UK£0.033 a share, following on from the last 12 months, when the company distributed a total of UK£0.05 per share to shareholders. Last year's total dividend payments show that UP Global Sourcing Holdings has a trailing yield of 2.5% on the current share price of £2.04. 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! So we need to investigate whether UP Global Sourcing Holdings can afford its dividend, and if the dividend could grow.

See our latest analysis for UP Global Sourcing Holdings

If a company pays out more in dividends than it earned, then the dividend might become unsustainable - hardly an ideal situation. UP Global Sourcing Holdings is paying out an acceptable 54% of its profit, a common payout level among most companies. A useful secondary check can be to evaluate whether UP Global Sourcing Holdings generated enough free cash flow to afford its dividend. Over the last year it paid out 65% of its free cash flow as dividends, within the usual range for most companies.

It's encouraging to see that the dividend is covered by both profit and cash flow. This generally suggests the dividend is sustainable, as long as earnings don't drop precipitously.

Click

here to see the company's payout ratio, plus analyst estimates of its future dividends.

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. If earnings fall far enough, the company could be forced to cut its dividend. This is why it's a relief to see UP Global Sourcing Holdings earnings per share are up 5.3% per annum over the last five years. While earnings have been growing at a credible rate, the company is paying out a majority of its earnings to shareholders. If management lifts the payout ratio further, we'd take this as a tacit signal that the company's growth prospects are slowing.

UP Global Sourcing Holdings also issued more than 5% of its market cap in new stock during the past year, which we feel is likely to hurt its dividend prospects in the long run. It's hard to grow dividends per share when a company keeps creating new shares.

Many investors will assess a company's dividend performance by evaluating how much the dividend payments have changed over time. UP Global Sourcing Holdings has delivered an average of 9.2% per year annual increase in its dividend, based on the past five years of dividend payments. We're glad to see dividends rising alongside earnings over a number of years, which may be a sign the company intends to share the growth with shareholders.

To Sum It Up

Should investors buy UP Global Sourcing Holdings for the upcoming dividend? Earnings per share have been growing modestly and UP Global Sourcing Holdings paid out a bit over half of its earnings and free cash flow last year. It might be worth researching if the company is reinvesting in growth projects that could grow earnings and dividends in the future, but for now we're not all that optimistic on its dividend prospects.

With that being said, if dividends aren't your biggest concern with UP Global Sourcing Holdings, you should know about the other risks facing this business. Our analysis shows

3 warning signs for UP Global Sourcing Holdings

and you should be aware of these before buying any shares.

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.

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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.

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