Here's What We Like About Venus Remedies' (NSE:VENUSREM) Upcoming Dividend
Regular readers will know that we love our dividends at Simply Wall St, which is why it's exciting to see Venus Remedies Limited (NSE:VENUSREM) is about to trade ex-dividend in the next two 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 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. In other words, investors can purchase Venus Remedies' shares before the 7th of August in order to be eligible for the dividend, which will be paid on the 19th of September.
The upcoming dividend for Venus Remedies will put a total of ₹10.00 per share in shareholders' pockets. Dividends are an important source of income to many shareholders, but the health of the business is crucial to maintaining those dividends. That's why we should always check whether the dividend payments appear sustainable, and if the company is growing.
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. Venus Remedies paid out just 13% of its profit last year, which we think is conservatively low and leaves plenty of margin for unexpected circumstances.
View our latest analysis for Venus Remedies
Click here to see how much of its profit Venus Remedies paid out over the last 12 months.
Have Earnings And Dividends Been Growing?
Businesses with strong growth prospects usually make the best dividend payers, because it's easier to grow dividends when earnings per share are improving. If business enters a downturn and the dividend is cut, the company could see its value fall precipitously. For this reason, we're glad to see Venus Remedies's earnings per share have risen 12% per annum over the last five years. The company has managed to grow earnings at a rapid rate, while reinvesting most of the profits within the business. Fast-growing businesses that are reinvesting heavily are enticing from a dividend perspective, especially since they can often increase the payout ratio later.
This is Venus Remedies's first year of paying a regular dividend, which is exciting for shareholders - but it does mean there's no dividend history to examine.
To Sum It Up
From a dividend perspective, should investors buy or avoid Venus Remedies? When companies are growing rapidly and retaining a majority of the profits within the business, it's usually a sign that reinvesting earnings creates more value than paying dividends to shareholders. Perhaps even more importantly - this can sometimes signal management is focused on the long term future of the business. In summary, Venus Remedies appears to have some promise as a dividend stock, and we'd suggest taking a closer look at it.
While it's tempting to invest in Venus Remedies for the dividends alone, you should always be mindful of the risks involved. Our analysis shows 1 warning sign for Venus Remedies 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.