Latest news with #AustralianFoundationInvestment
Yahoo
02-08-2025
- Business
- Yahoo
It Might Not Be A Great Idea To Buy Australian Foundation Investment Company Limited (ASX:AFI) For Its Next Dividend
Australian Foundation Investment Company Limited (ASX:AFI) stock is about to trade ex-dividend in 2 days. The ex-dividend date is usually set to be two business days before the record date, which is the cut-off date on which you must be present on the company's books as a shareholder in order to receive the dividend. It is important to be aware of the ex-dividend date because any trade on the stock needs to have been settled on or before the record date. This means that investors who purchase Australian Foundation Investment's shares on or after the 5th of August will not receive the dividend, which will be paid on the 28th of August. The company's next dividend payment will be AU$0.195 per share, on the back of last year when the company paid a total of AU$0.27 to shareholders. Last year's total dividend payments show that Australian Foundation Investment has a trailing yield of 3.5% on the current share price of AU$7.63. 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 check whether the dividend payments are covered, and if earnings are growing. Trump has pledged to "unleash" American oil and gas and these 15 US stocks have developments that are poised to benefit. Dividends are usually paid out of company profits, so if a company pays out more than it earned then its dividend is usually at greater risk of being cut. Australian Foundation Investment distributed an unsustainably high 117% of its profit as dividends to shareholders last year. Without extenuating circumstances, we'd consider the dividend at risk of a cut. Generally, the higher a company's payout ratio, the more the dividend is at risk of being reduced. View our latest analysis for Australian Foundation Investment Click here to see how much of its profit Australian Foundation Investment paid out over the last 12 months. 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. This is why it's a relief to see Australian Foundation Investment earnings per share are up 2.7% per annum over the last five years. Many investors will assess a company's dividend performance by evaluating how much the dividend payments have changed over time. Australian Foundation Investment has delivered 1.4% dividend growth per year on average over the past 10 years. To Sum It Up Is Australian Foundation Investment an attractive dividend stock, or better left on the shelf? While we like that its earnings are growing somewhat, we're not enamored that it's paying out 117% of last year's earnings. Australian Foundation Investment doesn't appear to have a lot going for it, and we're not inclined to take a risk on owning it for the dividend. Although, if you're still interested in Australian Foundation Investment and want to know more, you'll find it very useful to know what risks this stock faces. In terms of investment risks, we've identified 1 warning sign with Australian Foundation Investment and understanding them should be part of your investment process. A common investing mistake is buying the first interesting stock you see. Here you can find a full list of high-yield dividend stocks. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) 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.
Yahoo
26-01-2025
- Business
- Yahoo
Australian Foundation Investment (ASX:AFI) Is Due To Pay A Dividend Of A$0.12
Australian Foundation Investment Company Limited's (ASX:AFI) investors are due to receive a payment of A$0.12 per share on 25th of February. Based on this payment, the dividend yield for the company will be 3.4%, which is fairly typical for the industry. See our latest analysis for Australian Foundation Investment We like a dividend to be consistent over the long term, so checking whether it is sustainable is important. Prior to this announcement, the company was paying out 110% of what it was earning. This situation certainly isn't ideal, and could place significant strain on the balance sheet if it continues. Looking forward, EPS could fall by 1.6% if the company can't turn things around from the last few years. If the dividend continues along recent trends, we estimate the payout ratio could reach 114%, which could put the dividend in jeopardy if the company's earnings don't improve. The company has an extended history of paying stable dividends. The dividend has gone from an annual total of A$0.22 in 2015 to the most recent total annual payment of A$0.26. This means that it has been growing its distributions at 1.7% per annum over that time. Slow and steady dividend growth might not sound that exciting, but dividends have been stable for ten years, which we think makes this a fairly attractive offer. The company's investors will be pleased to have been receiving dividend income for some time. Let's not jump to conclusions as things might not be as good as they appear on the surface. Unfortunately, Australian Foundation Investment's earnings per share has been essentially flat over the past five years, which means the dividend may not be increased each year. Overall, this is probably not a great income stock, even though the dividend is being raised at the moment. In the past the payments have been stable, but we think the company is paying out too much for this to continue for the long term. We would probably look elsewhere for an income investment. Companies possessing a stable dividend policy will likely enjoy greater investor interest than those suffering from a more inconsistent approach. At the same time, there are other factors our readers should be conscious of before pouring capital into a stock. For example, we've picked out 1 warning sign for Australian Foundation Investment that investors should know about before committing capital to this stock. Looking for more high-yielding dividend ideas? Try our collection of strong dividend payers. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) 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. Sign in to access your portfolio
