Only Three Days Left To Cash In On U.S. Global Investors' (NASDAQ:GROW) Dividend

U.S. Global Investors, Inc. (NASDAQ:GROW) is about to trade ex-dividend in the next three days. The ex-dividend date is one business day before a company's record date, which is the date on which the company determines which shareholders are entitled to receive a dividend. The ex-dividend date is an important date to be aware of as any purchase of the stock made on or after this date might mean a late settlement that doesn't show on the record date. Thus, you can purchase U.S. Global Investors' shares before the 9th of October in order to receive the dividend, which the company will pay on the 26th of October.

The company's upcoming dividend is US$0.0075 a share, following on from the last 12 months, when the company distributed a total of US$0.09 per share to shareholders. Calculating the last year's worth of payments shows that U.S. Global Investors has a trailing yield of 3.1% on the current share price of US$2.86. Dividends are a major contributor to investment returns for long term holders, but only if the dividend continues to be paid. As a result, readers should always check whether U.S. Global Investors has been able to grow its dividends, or if the dividend might be cut.

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Dividends are usually paid out of company profits, so if a company pays out more than it earned then its dividend is usually at greater risk of being cut. Fortunately U.S. Global Investors's payout ratio is modest, at just 37% of profit.

When a company paid out less in dividends than it earned in profit, this generally suggests its dividend is affordable. The lower the % of its profit that it pays out, the greater the margin of safety for the dividend if the business enters a downturn.

View our latest analysis for U.S. Global Investors

Click here to see how much of its profit U.S. Global Investors paid out over the last 12 months.

Have Earnings And Dividends Been Growing?

Businesses with shrinking earnings are tricky from a dividend perspective. If earnings decline and the company is forced to cut its dividend, investors could watch the value of their investment go up in smoke. U.S. Global Investors's earnings have collapsed faster than Wile E Coyote's schemes to trap the Road Runner; down a tremendous 35% a year over the past five years.

The main way most investors will assess a company's dividend prospects is by checking the historical rate of dividend growth. In the past 10 years, U.S. Global Investors has increased its dividend at approximately 12% a year on average.

Final Takeaway

Has U.S. Global Investors got what it takes to maintain its dividend payments? U.S. Global Investors's earnings per share are down over the past five years, although it has the cushion of a low payout ratio, which would suggest a cut to the dividend is relatively unlikely. We're unconvinced on the company's merits, and think there might be better opportunities out there.

So if you want to do more digging on U.S. Global Investors, you'll find it worthwhile knowing the risks that this stock faces. Be aware that U.S. Global Investors is showing 4 warning signs in our investment analysis, and 2 of those make us uncomfortable...

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.