Read This Before Considering U.S. Global Investors, Inc. (NASDAQ:GROW) For Its Upcoming US$0.0075 Dividend
Some investors rely on dividends for growing their wealth, and if you're one of those dividend sleuths, you might be intrigued to know that U.S. Global Investors, Inc. (NASDAQ:GROW) is about to go ex-dividend in just three days. The ex-dividend date is usually set to be one business day 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 U.S. Global Investors' shares on or after the 16th of November will not receive the dividend, which will be paid on the 30th of November.
The company's next dividend payment will be US$0.0075 per share, and in the last 12 months, the company paid a total of US$0.09 per share. Based on the last year's worth of payments, U.S. Global Investors stock has a trailing yield of around 3.5% on the current share price of US$2.57. Dividends are an important source of income to many shareholders, but the health of the business is crucial to maintaining those dividends. As a result, readers should always check whether U.S. Global Investors has been able to grow its dividends, or if the dividend might be cut.
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. U.S. Global Investors paid out a comfortable 37% of its profit last year.
Companies that pay out less in dividends than they earn in profits generally have more sustainable dividends. The lower the payout ratio, the more wiggle room the business has before it could be forced to cut the dividend.
Check out our latest analysis for U.S. Global Investors
Click here to see how much of its profit U.S. Global Investors paid out over the last 12 months.
Have Earnings And Dividends Been Growing?
Companies with falling earnings are riskier for dividend shareholders. If earnings fall far enough, the company could be forced to cut its dividend. U.S. Global Investors's earnings per share have plummeted approximately 35% a year over the previous five years.
Another key way to measure a company's dividend prospects is by measuring its historical rate of dividend growth. U.S. Global Investors has delivered 12% dividend growth per year on average over the past 10 years.
Final Takeaway
From a dividend perspective, should investors buy or avoid U.S. Global Investors? U.S. Global Investors's earnings per share are down over the past five years, although it has the cushion of a low payout ratio, which would suggest a cut to the dividend is relatively unlikely. We're unconvinced on the company's merits, and think there might be better opportunities out there.
If you want to look further into U.S. Global Investors, it's worth knowing the risks this business faces. We've identified 4 warning signs with U.S. Global Investors (at least 2 which are potentially serious), and understanding these 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) simplywallst.com.