Faber Company Inc. (TSE:220A) Goes Ex-Dividend Soon
Faber Company Inc. (TSE:220A) stock is about to trade ex-dividend in three days. The ex-dividend date is commonly two business days 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 at least two full business days. So if you miss that date, you would not show up on the company's books on the record date. This means that investors who purchase Faber's shares on or after the 29th of September will not receive the dividend, which will be paid on the 8th of December.
The company's next dividend payment will be JP¥30.00 per share, and in the last 12 months, the company paid a total of JP¥30.00 per share. Based on the last year's worth of payments, Faber stock has a trailing yield of around 3.1% on the current share price of JP¥962.00. If you buy this business for its dividend, you should have an idea of whether Faber's dividend is reliable and sustainable. So we need to investigate whether Faber can afford its dividend, and if the dividend could grow.
Dividends are typically paid out of company income, so if a company pays out more than it earned, its dividend is usually at a higher risk of being cut. Faber paid out a comfortable 26% of its profit last year.
View our latest analysis for Faber
Click here to see how much of its profit Faber paid out over the last 12 months.
Have Earnings And Dividends Been Growing?
Businesses with shrinking earnings are tricky from a dividend perspective. If business enters a downturn and the dividend is cut, the company could see its value fall precipitously. So we're not too excited that Faber's earnings are down 2.3% a year over the past five years.
Another key way to measure a company's dividend prospects is by measuring its historical rate of dividend growth. Faber has delivered an average of 22% per year annual increase in its dividend, based on the past two years of dividend payments.
To Sum It Up
Is Faber worth buying for its dividend? Earnings per share have shrunk noticeably in recent years, although we like that the company has a low payout ratio. This could suggest a cut to the dividend may not be a major risk in the near future. In summary, Faber appears to have some promise as a dividend stock, and we'd suggest taking a closer look at it.
In light of that, while Faber has an appealing dividend, it's worth knowing the risks involved with this stock. Our analysis shows 1 warning sign for Faber and you should be aware of it before buying any shares.
A common investing mistake is buying the first interesting stock you see. Here you can find a full list of high-yield dividend stocks.
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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.