Braemar Shipping Services Plc (LON:BMS) Will Pay A UK£0.05 Dividend In Four Days

Simply Wall St
·3 min read

Regular readers will know that we love our dividends at Simply Wall St, which is why it's exciting to see Braemar Shipping Services Plc (LON:BMS) is about to trade ex-dividend in the next 4 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 of consequence because whenever a stock is bought or sold, the trade takes at least two business day to settle. Thus, you can purchase Braemar Shipping Services' shares before the 22nd of July in order to receive the dividend, which the company will pay on the 1st of September.

The company's next dividend payment will be UK£0.05 per share, and in the last 12 months, the company paid a total of UK£0.05 per share. Looking at the last 12 months of distributions, Braemar Shipping Services has a trailing yield of approximately 1.6% on its current stock price of £3.095. Dividends are a major contributor to investment returns for long term holders, but only if the dividend continues to be paid. So we need to investigate whether Braemar Shipping Services can afford its dividend, and if the dividend could grow.

Check out our latest analysis for Braemar Shipping Services

If a company pays out more in dividends than it earned, then the dividend might become unsustainable - hardly an ideal situation. Braemar Shipping Services has a low and conservative payout ratio of just 21% of its income after tax.

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

historic-dividend
historic-dividend

Have Earnings And Dividends Been Growing?

Companies that aren't growing their earnings can still be valuable, but it is even more important to assess the sustainability of the dividend if it looks like the company will struggle to grow. If earnings decline and the company is forced to cut its dividend, investors could watch the value of their investment go up in smoke. With that in mind, we're not enthused to see that Braemar Shipping Services's earnings per share have remained effectively flat over the past five years. It's better than seeing them drop, certainly, but over the long term, all of the best dividend stocks are able to meaningfully grow their earnings per share.

Many investors will assess a company's dividend performance by evaluating how much the dividend payments have changed over time. Braemar Shipping Services's dividend payments per share have declined at 15% per year on average over the past 10 years, which is uninspiring.

The Bottom Line

From a dividend perspective, should investors buy or avoid Braemar Shipping Services? Braemar Shipping Services's earnings per share are basically flat 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. In summary, Braemar Shipping Services 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 Braemar Shipping Services for the dividends alone, you should always be mindful of the risks involved. Case in point: We've spotted 5 warning signs for Braemar Shipping Services you should be aware of.

We wouldn't recommend just buying the first dividend stock you see, though. Here's a list of interesting 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.

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