Best of the Best PLC (LON:BOTB) Passed Our Checks, And It's About To Pay A UK£0.50 Dividend

Simply Wall St
·4 min read

Some investors rely on dividends for growing their wealth, and if you're one of those dividend sleuths, you might be intrigued to know that Best of the Best PLC (LON:BOTB) is about to go ex-dividend in just 3 days. Typically, the ex-dividend date is one business day before the record date which is the date on which a company determines the shareholders eligible to receive a dividend. The ex-dividend date is important as the process of settlement involves two full business days. So if you miss that date, you would not show up on the company's books on the record date. Accordingly, Best of the Best investors that purchase the stock on or after the 1st of July will not receive the dividend, which will be paid on the 16th of July.

The company's upcoming dividend is UK£0.50 a share, following on from the last 12 months, when the company distributed a total of UK£0.95 per share to shareholders. Based on the last year's worth of payments, Best of the Best has a trailing yield of 5.6% on the current stock price of £17. If you buy this business for its dividend, you should have an idea of whether Best of the Best's dividend is reliable and sustainable. So we need to check whether the dividend payments are covered, and if earnings are growing.

Check out our latest analysis for Best of the Best

If a company pays out more in dividends than it earned, then the dividend might become unsustainable - hardly an ideal situation. Best of the Best is paying out just 4.1% of its profit after tax, which is comfortably low and leaves plenty of breathing room in the case of adverse events. That said, even highly profitable companies sometimes might not generate enough cash to pay the dividend, which is why we should always check if the dividend is covered by cash flow. It paid out 2.3% of its free cash flow as dividends last year, which is conservatively low.

It's encouraging to see that the dividend is covered by both profit and cash flow. This generally suggests the dividend is sustainable, as long as earnings don't drop precipitously.

Click here to see how much of its profit Best of the Best paid out over the last 12 months.

historic-dividend
historic-dividend

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 earnings fall far enough, the company could be forced to cut its dividend. That's why it's comforting to see Best of the Best's earnings have been skyrocketing, up 66% per annum for the past five years. With earnings per share growing rapidly and the company sensibly reinvesting almost all of its profits within the business, Best of the Best looks like a promising growth company.

The main way most investors will assess a company's dividend prospects is by checking the historical rate of dividend growth. In the last 10 years, Best of the Best has lifted its dividend by approximately 55% a year on average. It's great to see earnings per share growing rapidly over several years, and dividends per share growing right along with it.

Final Takeaway

Is Best of the Best an attractive dividend stock, or better left on the shelf? Best of the Best has grown its earnings per share while simultaneously reinvesting in the business. Unfortunately it's cut the dividend at least once in the past 10 years, but the conservative payout ratio makes the current dividend look sustainable. It's a promising combination that should mark this company worthy of closer attention.

On that note, you'll want to research what risks Best of the Best is facing. For example, we've found 2 warning signs for Best of the Best that we recommend you consider before investing in the business.

A common investment mistake is buying the first interesting stock you see. Here you can find a list of promising dividend stocks with a greater than 2% yield and an upcoming dividend.

This article by Simply Wall St is general in nature. 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

Our goal is to create a safe and engaging place for users to connect over interests and passions. In order to improve our community experience, we are temporarily suspending article commenting

Recommended Stories

  • Workhorse Looks Like It’s Probably Dead in the Water Here

    Workhorse (NASDAQ:WKHS) reported very weak first-quarter results and appears to have no viable, strong, upcoming, positive catalysts. WKHS stock is in trouble. Source: Shutterstock The EV maker’s inability to win any major deals or recruit any impressive partners so far, its apparent failure to cash in on opportunities with the U.S. Post Office and UPS (NYSE:UPS), along with the tremendous struggles of an affiliated company, Lordstown Motors (NASDAQ:RIDE), all bode very badly for its outlook. As

  • Billionaire Leon Cooperman is Crazy About these 10 Stocks

    In this article, we examined Billionaire Leon Cooperman’s portfolio management strategy and why Billionaire Leon Cooperman is crazy about these 10 stocks. If you want to skip our detailed analysis of Cooperman’s history and hedge fund performance, go directly to Billionaire Leon Cooperman is Crazy About these 5 Stocks. The hedge fund manager and American […]

  • 2 ‘Strong Buy’ Dividend Stocks With 7% Yields

    Inflation may be rising, but for now, at least, investors don’t seem to mind. Both the NASDAQ and the S&P 500 are holding just below their all-time high levels. But are the good times here to stay? One clue to the answer came in last week’s Federal Open Market Committee meeting, where officials indicated that two interest rate increases are possible as early as 2023, and the committee came just ‘two dots,’ or two members’ votes, from pulling at least one of those increases into next year. This i

  • 3 High-Yield Stocks With Secure Payouts

    The S&P 500 has nearly doubled off its bottom last year and has climbed to new all-time highs. As a result, it has become challenging for investors to identify reasonably valued stocks with high dividend yields. In the current environment, many high-dividend stocks do not offer secure dividends, and their high yields are simply the result of a crashing share price. When a stock offers a high dividend yield, investors should perform their due diligence before purchasing the stock. Otherwise, they

  • AT&T’s Inc., (NYSE:T) relatively Low Price can net a 7.3% Dividend Yield

    AT&T Inc. ( NYSE:T ) provides telecommunication, media, and technology services worldwide. Most of the company revenue is derived from the communications segment, where they provide a nationwide wireless service, business advanced IP-based services, broadband & fiber communication services primarily to residential customers. In aggregate, this segment generates more than US$139b in revenue, which represents 80% of the total $US 171b operating revenue for 2020.

  • Bitcoin Resumes Slide Toward Closely Watched Technical Level

    (Bloomberg) -- Bitcoin fell for the first time in four trading sessions, pushing the largest cryptocurrency back toward price levels that technical analysts say could portend greater losses.The virtual currency fell as much as 9.2% to $31,667 in New York trading, capping a volatile week that saw the prices swing almost $10,000.On Monday, the original cryptocurrency formed a death cross, meaning its average price over the last 50 days fell below that of its 200-day moving average. The indicator i

  • Palantir’s Abundant Free Cash Flow Will Float PLTR Stock Higher

    Palantir (NYSE:PLTR) reported stellar earnings on May 11 for the first quarter, showing massive revenue and free-cash-flow growth. I predicted that Palantir, the software company for the intelligence community, would turn free-cash-flow positive late last year. Now it has come true. The company’s FCF will continue to spike higher with revenue growth. And that will push PLTR stock much higher. Source: Sundry Photography / Shutterstock.com Here is what happened. Palantir reported that revenue rose

  • 10 Stocks to Buy to Profit from Post-COVID Economic Recovery

    In this article, we discuss the 10 stocks to buy to profit from post-COVID economic recovery. If you want to skip our detailed analysis of these stocks, go directly to the 5 Stocks to Buy to Profit from Post-COVID Economic Recovery. Inflation fears and a cryptocurrency slump in recent weeks have hit some of the […]

  • Warren Buffett's top 8 lessons from the COVID-19 pandemic

    The legendary investor says these are the key takeaways for investors and consumers.

  • How to Make Money in Real Estate Without Owning a Property

    There's a clever subset of real estate investors who aren't landlords at all. Here's how you can make a profit from real estate without owning a single rental property.

  • Want to Buy Paysafe (PSFE) Stock? See This First.

    Paysafe Ltd is a payments platform providing businesses and consumers with payment processing, digital wallets, online cash solutions and related support. Through Integrated Processing, the Digital Wallet and eCash Solutions, Paysafe serves the U.S., Germany, the U.K. and many other countries. Step 1: Open up a brokerage account. You can open a brokerage account with your personal information, bank routing information and an email address. When you set up your account, you must provide a valid a

  • Suze Orman's 5 rules for avoiding the poorhouse in retirement

    The personal finance superstar doesn't want you running out of coin in your golden years.

  • Are These 3 High-Dividend Mortgage REITs Attractive Right Now?

    With interest rates still hovering near historic lows, quality high dividend stocks are increasingly difficult to find. One of the best sectors for finding high-yielding stocks today without taking on too much risk is mortgage REITs. Each of these three mortgage REITs offer investors a lucrative dividend yield that is at little risk of being cut for the foreseeable future. That said, none of them offer attractive growth potential due to the extremely low interest rates facing the economy right n

  • Genius Brands Could Pop on Its Shockingly Strong Cash Position

    Kid-focused streaming entertainment provider Genius Brands (NASDAQ:GNUS) offers a vast and expanding pipeline of children’s media content. Yet, not everyone takes GNUS stock seriously. Source: patat / Shutterstock.com If your timing is good, it’s possible to double your money as a Genius Brands investor. This has actually happened in early 2021.InvestorPlace - Stock Market News, Stock Advice & Trading Tips But again, the company has its detractors. There are a number of reasons for this. Mainly,

  • AbbVie Inc. (NYSE:ABBV) is Finding Balance between Dividends and Growth

    AbbVie Inc. ( NYSE:ABBV ) is a large international pharmaceutical company. AbbVie has six major focus areas including: immunology, oncology, neuroscience, eye care, virology, aesthetics. They have a strong and diversified pipeline of products that are in various stages of development and FDA approval.

  • PSFE Stock: Why Redditors Are Betting on a Big Short Squeeze for Paysafe

    Paysafe (NYSE:PSFE) stock is seeing major gains on Friday despite a lack of news from the payment solutions provider. Source: Sulastri Sulastri / Shutterstock.com So what has PSFE stock soaring today! It all has to do with retail traders over on the WallStreetBets Reddit setting it up for a short squeeze. Traders on the social media hub are gathering to boost up shares of the stock to push out hedge funds shorting it. The big push for PSFE came after a due diligence post went up breaking down th

  • Entera Bio Stock Could More Than Double From Here, Says Analyst

    In the biotech space, big announcements often precede big share price movements; both were on tap for Entera Bio (ENTX) on Wednesday. Entera shares took off after the company provided an update from the placebo-controlled, double blind Phase 2 trial of EB613, Entera’s drug candidate for the treatment of osteoporosis. Following 6 months of treatment, the study achieved its key endpoints. Participants who took a 2.5 mg dose of EB613 displayed meaningful dose-related increases in bone mineral densi

  • Tempted to turn your home's soaring equity into cash? Don't do it lightly: Fannie Mae chair

    Homeownership is a good way to build wealth, if you are careful and diligent. Weigh costs, benefits and risks before pulling cash out of a home.

  • Tanzania Plan Crypto Ban U-Turn Following President’s Directive

    Tanzania’s central bank is looking to reverse its decision to ban cryptocurrencies in the country following President Samia Suluhu Hassan’s directive.

  • 10 Best Dividend Stocks to Buy According to Billionaire Ken Griffin

    In this article, we will discuss the 10 best dividend stocks to buy according to billionaire Ken Griffin. If you want to skip our detailed analysis of Griffin’s history and hedge fund performance, go directly to the 5 Best Dividend Stocks to Buy Now According to Billionaire Ken Griffin. The self-made billionaire Ken Griffin began investing in […]