Galaxy Surfactants Limited (NSE:GALAXYSURF) Stock Goes Ex-Dividend In Just Three Days

It looks like Galaxy Surfactants Limited (NSE:GALAXYSURF) is about to go 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. The ex-dividend date is important because any transaction on a stock needs to have been settled before the record date in order to be eligible for a dividend. Accordingly, Galaxy Surfactants investors that purchase the stock on or after the 31st of July will not receive the dividend, which will be paid on the 11th of September.

The company's upcoming dividend is ₹22.00 a share, following on from the last 12 months, when the company distributed a total of ₹22.00 per share to shareholders. Based on the last year's worth of payments, Galaxy Surfactants stock has a trailing yield of around 1.1% on the current share price of ₹1945.00. If you buy this business for its dividend, you should have an idea of whether Galaxy Surfactants's dividend is reliable and sustainable. As a result, readers should always check whether Galaxy Surfactants has been able to grow its dividends, or if the dividend might be cut.

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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. That's why it's good to see Galaxy Surfactants paying out a modest 29% of its earnings. Yet cash flows are even more important than profits for assessing a dividend, so we need to see if the company generated enough cash to pay its distribution. The good news is it paid out just 11% of its free cash flow in the last year.

It's positive to see that Galaxy Surfactants's dividend is covered by both profits and cash flow, since this is generally a sign that the dividend is sustainable, and a lower payout ratio usually suggests a greater margin of safety before the dividend gets cut.

See our latest analysis for Galaxy Surfactants

Click here to see the company's payout ratio, plus analyst estimates of its future dividends.

Have Earnings And Dividends Been Growing?

Companies with falling earnings are riskier for dividend shareholders. If earnings decline and the company is forced to cut its dividend, investors could watch the value of their investment go up in smoke. That's why it's not ideal to see Galaxy Surfactants's earnings per share have been shrinking at 2.4% a year over the previous five years.

Many investors will assess a company's dividend performance by evaluating how much the dividend payments have changed over time. In the past eight years, Galaxy Surfactants has increased its dividend at approximately 15% a year on average.

Final Takeaway

Has Galaxy Surfactants got what it takes to maintain its dividend payments? Galaxy Surfactants has comfortably low cash and profit payout ratios, which may mean the dividend is sustainable even in the face of a sharp decline in earnings per share. Still, we consider declining earnings to be a warning sign. In summary, it's hard to get excited about Galaxy Surfactants from a dividend perspective.

In light of that, while Galaxy Surfactants has an appealing dividend, it's worth knowing the risks involved with this stock. For example, we've found 1 warning sign for Galaxy Surfactants that we recommend you consider before investing in the business.

If you're in the market for strong dividend payers, we recommend checking our selection of top 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.