Readers hoping to buy Octopus Renewables Infrastructure Trust plc (LON:ORIT) for its dividend will need to make their move shortly, as the stock is about to trade ex-dividend. 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 important as the process of settlement involves at least two full business days. So if you miss that date, you would not show up on the company's books on the record date. Therefore, if you purchase Octopus Renewables Infrastructure Trust's shares on or after the 13th of August, you won't be eligible to receive the dividend, when it is paid on the 1st of September.
The company's next dividend payment will be UK£0.0156 per share, and in the last 12 months, the company paid a total of UK£0.062 per share. Calculating the last year's worth of payments shows that Octopus Renewables Infrastructure Trust has a trailing yield of 10.0% on the current share price of UK£0.618. We love seeing companies pay a dividend, but it's also important to be sure that laying the golden eggs isn't going to kill our golden goose! As a result, readers should always check whether Octopus Renewables Infrastructure Trust has been able to grow its dividends, or if the dividend might be cut.
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. Octopus Renewables Infrastructure Trust lost money last year, so the fact that it's paying a dividend is certainly disconcerting. There might be a good reason for this, but we'd want to look into it further before getting comfortable.
See our latest analysis for Octopus Renewables Infrastructure Trust
Have Earnings And Dividends Been Growing?
Companies with falling earnings are riskier for dividend shareholders. If business enters a downturn and the dividend is cut, the company could see its value fall precipitously. Octopus Renewables Infrastructure Trust reported a loss last year, and the general trend suggests its earnings have also been declining in recent years, making us wonder if the dividend is at risk.
The main way most investors will assess a company's dividend prospects is by checking the historical rate of dividend growth. Octopus Renewables Infrastructure Trust has delivered 6.5% dividend growth per year on average over the past six years.
Get our latest analysis on Octopus Renewables Infrastructure Trust's balance sheet health here.
Final Takeaway
From a dividend perspective, should investors buy or avoid Octopus Renewables Infrastructure Trust? It's definitely not great to see that it paid a dividend despite reporting a loss last year. Worse, the general trend in its earnings looks negative in recent times. Octopus Renewables Infrastructure Trust doesn't appear to have a lot going for it, and we're not inclined to take a risk on owning it for the dividend.
So if you're still interested in Octopus Renewables Infrastructure Trust despite it's poor dividend qualities, you should be well informed on some of the risks facing this stock. For example, we've found 3 warning signs for Octopus Renewables Infrastructure Trust that we recommend you consider before investing in the business.
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.