Procter & Gamble Hygiene and Health Care Limited (NSE:PGHH) is about to trade ex-dividend in the next 3 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. Accordingly, Procter & Gamble Hygiene and Health Care investors that purchase the stock on or after the 28th of August will not receive the dividend, which will be paid on the 4th of October.
The company's upcoming dividend is ₹65.00 a share, following on from the last 12 months, when the company distributed a total of ₹205 per share to shareholders. Looking at the last 12 months of distributions, Procter & Gamble Hygiene and Health Care has a trailing yield of approximately 1.3% on its current stock price of ₹13307.00. If you buy this business for its dividend, you should have an idea of whether Procter & Gamble Hygiene and Health Care's dividend is reliable and sustainable. We need to see whether the dividend is covered by earnings and if it's growing.
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. Last year Procter & Gamble Hygiene and Health Care paid out 93% of its profits as dividends to shareholders, suggesting the dividend is not well covered by earnings.
Check out our latest analysis for Procter & Gamble Hygiene and Health Care
Companies with consistently growing earnings per share generally make the best dividend stocks, as they usually find it easier to grow dividends per share. 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, Procter & Gamble Hygiene and Health Care's earnings per share have been growing at 11% a year for the past five years.
Many investors will assess a company's dividend performance by evaluating how much the dividend payments have changed over time. Since the start of our data, 10 years ago, Procter & Gamble Hygiene and Health Care has lifted its dividend by approximately 20% a year on average. It's exciting to see that both earnings and dividends per share have grown rapidly over the past few years.
Is Procter & Gamble Hygiene and Health Care worth buying for its dividend? It's been growing earnings per share at a pleasant rate, although its dividend payout was not well covered by earnings. Procter & Gamble Hygiene and Health Care 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.
So while Procter & Gamble Hygiene and Health Care looks good from a dividend perspective, it's always worthwhile being up to date with the risks involved in this stock. In terms of investment risks, we've identified 1 warning sign with Procter & Gamble Hygiene and Health Care and understanding them should be part of your investment process.
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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.