There's A Lot To Like About Anglo Asian Mining's (LON:AAZ) Upcoming US$0.06 Dividend
Regular readers will know that we love our dividends at Simply Wall St, which is why it's exciting to see Anglo Asian Mining PLC (LON:AAZ) is about to trade ex-dividend in the next 3 days. The ex-dividend date generally occurs two days before the record date, which is the day on which shareholders need to be on the company's books in order 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. Accordingly, Anglo Asian Mining investors that purchase the stock on or after the 5th of November will not receive the dividend, which will be paid on the 26th of November.
The company's next dividend payment will be US$0.06 per share, and in the last 12 months, the company paid a total of US$0.08 per share. Based on the last year's worth of payments, Anglo Asian Mining has a trailing yield of 2.3% on the current stock price of UK£3.90. Dividends are an important source of income to many shareholders, but the health of the business is crucial to maintaining those dividends. As a result, readers should always check whether Anglo Asian Mining has been able to grow its dividends, or if the dividend might be cut.
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. Anglo Asian Mining has a low and conservative payout ratio of just 19% of its income after tax.
View our latest analysis for Anglo Asian Mining
Click here to see how much of its profit Anglo Asian Mining paid out over the last 12 months.
Have Earnings And Dividends Been Growing?
Stocks in companies that generate sustainable earnings growth often make the best dividend prospects, as it is easier to lift the dividend when earnings are rising. If earnings fall far enough, the company could be forced to cut its dividend. That's why it's comforting to see Anglo Asian Mining's earnings have been skyrocketing, up 21% per annum for the past five years. Anglo Asian Mining looks like a real growth company, with earnings per share growing at a cracking pace and the company reinvesting most of its profits in the business.
Many investors will assess a company's dividend performance by evaluating how much the dividend payments have changed over time. In the last eight years, Anglo Asian Mining has lifted its dividend by approximately 9.1% a year on average. We're glad to see dividends rising alongside earnings over a number of years, which may be a sign the company intends to share the growth with shareholders.
The Bottom Line
Has Anglo Asian Mining got what it takes to maintain its dividend payments? Typically, companies that are growing rapidly and paying out a low fraction of earnings are keeping the profits for reinvestment in the business. This strategy can add significant value to shareholders over the long term - as long as it's done without issuing too many new shares. We think this is a pretty attractive combination, and would be interested in investigating Anglo Asian Mining more closely.
On that note, you'll want to research what risks Anglo Asian Mining is facing. Every company has risks, and we've spotted 1 warning sign for Anglo Asian Mining you should know about.
Generally, we wouldn't recommend just buying the first dividend stock you see. Here's a curated list of interesting stocks that are strong dividend payers.
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