It looks like LiveChat Software SA (WSE: LVC) is set to be ex-dividend within the next four days. Typically, the ex-dividend date is one business day prior to the record date which is the date a company determines which shareholders are eligible to receive a dividend. The ex-dividend date is important because every time a stock is bought or sold, the transaction takes at least two business days to settle. Therefore, if you buy LiveChat Software shares on or after December 23, you will not be eligible to receive the dividend when it is paid on January 3.
The company’s next dividend payment will be Z 1.14 per share. Last year, in total, the company distributed 3.69 z to shareholders. Looking at the last 12 months of distributions, LiveChat Software has returned around 3.1% of its current price of PLN 118.6. We love to see companies pay a dividend, but it’s also important to be sure that laying the golden eggs isn’t going to kill our goose that lays the golden eggs! Therefore, readers should always check whether LiveChat Software has been able to increase its dividends or if the dividend could be reduced.
Check out our latest review for LiveChat software
If a company pays more dividends than it has earned, then the dividend could become unsustainable – which is not an ideal situation. LiveChat Software paid out over half (64%) of its profits last year, which is a steady payout ratio for most companies. Yet cash flow is usually more important than earnings in assessing dividend sustainability, so we always need to check whether the company has generated enough cash to pay its dividend. In the past year, it has paid more than three-quarters (79%) of its generated free cash flow, which is quite high and could start to limit reinvestment in the business.
It is positive to see that LiveChat Software’s dividend is covered by both earnings and cash flow, as this is usually a sign that the dividend is sustainable, and a lower payout ratio usually suggests a larger margin. security before the dividend is cut.
Click here to view the company’s payout ratio, as well as analysts’ estimates of its future dividends.
Have profits and dividends increased?
Stocks of companies that generate sustainable earnings growth often offer the best dividend prospects because it’s easier to raise the dividend when earnings rise. If profits fall enough, the company could be forced to cut its dividend. This is why it is heartwarming to see that LiveChat Software’s revenue has skyrocketed, rising 32% per year for the past five years.
Another key way to measure a company’s dividend outlook is to measure its historical rate of dividend growth. LiveChat Software has generated dividend growth of 39% per year on average over the past seven years. Both earnings per share and dividends have been rising rapidly lately, which is great to see.
The bottom line
Is LiveChat Software Worth Buying For Its Dividend? It’s good to see earnings go up because all of the best dividend-paying stocks increase their earnings significantly over the long term. However, it should also be noted that LiveChat Software pays more than half of its profits and cash flow as profit, which could limit dividend growth if profit growth slows. While there are some good things to do, we are a bit ambivalent and it would take more to convince us of the merits of the LiveChat Software dividend.
With that in mind, an essential part of in-depth stock research is being aware of the risks stocks currently face. Concrete example: we have spotted 1 warning sign for LiveChat software you must be aware.
If you are looking for dividend paying stocks, we recommend that you take a look at our list of the highest dividend paying stocks with a yield above 2% and a dividend coming soon.
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This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts using only 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 into account your goals or your financial situation. Our aim is to bring you long-term, targeted analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price sensitive companies or qualitative documents. Simply Wall St has no position in any of the stocks mentioned.