Univest Financial Co., Ltd. (NASDAQ:UVSP) is scheduled to trade ex-dividend within the next two days. The ex-dividend date is one day before the record date. The record date is the date on which a shareholder must appear on the company's books in order to receive the dividend. The ex-dividend date is important because the settlement process takes two full business days. Therefore, if you miss that date, it will not be recorded on the company's books on the record date. This means that investors who purchased Univest Financial shares after May 7th will not receive the dividend paid on May 22nd.
The company's next dividend payment will be US$0.21 per share, following a total of US$0.84 paid to shareholders last year. Last year's total dividend payments indicate that Univest Financial has a yield to maturity of 3.8% on the current share price of $22.38. We love to see companies pay dividends, but it's also important to make sure our golden goose doesn't die by laying golden eggs. As a result, readers should always check whether Univest Financial has been able to grow its dividends, or if the dividends could be cut.
Check out our latest analysis for Univest Financial.
If a company pays out more in dividends than it earned in profit, then the dividend might become unsustainable – hardly an ideal situation. That's why it's good to see Univest Financial is paying out just 35% of its earnings.
If a company pays out less in dividends than it earned in profit, this generally suggests that its dividend is affordable. The lower the percentage of profits that a company pays out, the greater the margin of safety for the dividend if the business goes into a downturn.
Click here to see the company's payout ratio and analyst estimates of its future dividends.
Are profits and dividends growing?
Companies with promising growth potential are usually the ones that pay the most dividends, since it's easier to grow dividends when earnings per share are improving. Investors love dividends, so if earnings fall and the dividend is cut, you can expect the stock to sell off heavily at the same time. With that in mind, we're encouraged by Univest Financial's steady growth, with its earnings per share increasing by an average of 6.9% over the past five years.
Another important way to measure a company's dividend prospects is by measuring its historical dividend growth rate. Univest Financial's dividends are about the same as they were 10 years ago.
final point
From a dividend perspective, should investors buy or avoid Univest Financial? Univest Financial has seen modest earnings per share growth in recent years, with more than half of its profits reinvested in the business. Overall, this bodes well for the company's future prospects. We think this is a very attractive combination and would like to investigate Univest Financial further.
While it may be tempting to invest in Univest Financial solely for its dividend, you should always be aware of the risks involved.For example, Univest Financial 1 warning sign I think you should know.
If you're in the market looking for high dividends, we recommend: Check out our selection of high-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 using only unbiased methodologies, and articles are not intended to be financial advice. This is not a recommendation to buy or sell any stock, and does not take into account your objectives or financial situation. We aim to provide long-term, focused analysis based on fundamental data. Note that our analysis may not factor in the latest announcements or qualitative material from price-sensitive companies. Simply Wall St has no position in any stocks mentioned.
