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Income Investors Should Know That The Star Entertainment Group Limited (ASX:SGR) Goes Ex-Dividend Soon

The Star Entertainment Group Limited (ASX:SGR) is about to trade ex-dividend in the next 2 days. Ex-dividend means that investors that purchase the stock on or after the 21st of August will not receive this dividend, which will be paid on the 26th of September.

Star Entertainment Group’s next dividend payment will be AU$0.10 per share. Last year, in total, the company distributed AU$0.23 to shareholders. Looking at the last 12 months of distributions, Star Entertainment Group has a trailing yield of approximately 5.4% on its current stock price of A$3.79. Dividends are a major contributor to investment returns for long term holders, but only if the dividend continues to be paid. So we need to investigate whether Star Entertainment Group can afford its dividend, and if the dividend could grow.

Check out our latest analysis for Star Entertainment Group

If a company pays out more in dividends than it earned, then the dividend might become unsustainable – hardly an ideal situation. Its dividend payout ratio is 79% of profit, which means the company is paying out a majority of its earnings. The relatively limited profit reinvestment could slow the rate of future earnings growth It could become a concern if earnings started to decline. Yet cash flow is typically more important than profit for assessing dividend sustainability, so we should always check if the company generated enough cash to afford its dividend. It paid out an unsustainably high 280% of its free cash flow as dividends over the past 12 months, which is worrying. Our definition of free cash flow excludes cash generated

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