Be sure to consult Brookfield Asset Management Inc. (TSE: BAM.A) before it is ex-dividend

Some investors rely on dividends to grow their wealth, and if you’re one of those dividend sleuths, you might be intrigued to know that Brookfield Asset Management Inc. (TSE: BAM.A) is set to be ex-dividend in just four days. The ex-dividend date is generally set at one working day before the registration date which is the deadline by which you must be present in the books of the company as a shareholder to receive the dividend. The ex-dividend date is important because any share transaction must have been settled before the registration date to be eligible for a dividend. This means that investors who buy Brookfield Asset Management shares on or after November 29 will not receive the dividend, which will be paid on December 31.

The company’s upcoming dividend is US $ 0.13 per share, continuing the past 12 months when the company has distributed a total of US $ 0.52 per share to shareholders. Calculating the value of last year’s payouts shows that Brookfield Asset Management has a 0.9% return on the current stock price of C $ 74.11. Dividends are a major contributor to returns on investment for long-term holders, but only if the dividend continues to be paid. It is necessary to see if the dividend is covered by the profits and if it increases.

Check out our latest analysis for Brookfield Asset Management

Dividends are usually paid out of the company’s profits, so if a company pays more than what it earns, its dividend is usually at risk of being reduced. Brookfield Asset Management pays only 23% of its after-tax profit, which is comfortably low and leaves plenty of leeway in the event of adverse events.

Generally speaking, the lower a company’s payout ratios, the more resilient its dividend.

Click here to view the company’s payout ratio, as well as analysts’ estimates of its future dividends.

TSX: BAM.A Historic dividend November 24, 2021

Have profits and dividends increased?

Companies with consistently rising earnings per share usually make the best dividend-paying stocks because they generally find it easier to raise dividends per share. If profits fall and the company is forced to cut its dividend, investors could see the value of their investment go up in smoke. That’s why it’s a relief to see Brookfield Asset Management’s earnings per share grow 6.7% per year over the past five years.

Many investors will assess a company’s dividend performance by evaluating how much dividend payments have changed over time. Brookfield Asset Management has generated an average annual increase of 8.5% per annum in its dividend, based on dividend payments over the past 10 years. We are happy to see dividends increasing along with earnings over a number of years, which may be a sign that the company intends to share the growth with its shareholders.

The bottom line

Is Brookfield Asset Management Worth Buying For Its Dividend? It has increased its earnings per share somewhat in recent years, although it is reinvesting more than half of its earnings in the company, which could suggest that some growth plans have yet to materialize. We think this is a pretty interesting combination and would be interested in taking a closer look at Brookfield Asset Management.

With this in mind, an essential part of in-depth stock research is being aware of the risks stocks currently face. To this end, you should inquire about the 3 warning signs we spotted with Brookfield Asset Management (including 1 which is a bit worrying).

A common investment mistake is to buy the first interesting stock you see. Here you will find a list of promising dividend paying stocks with a yield above 2% and an upcoming dividend.

This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts using only unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell shares and does not take into account your goals or your financial situation. Our aim is to bring you long-term, targeted analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price sensitive companies or qualitative material. Simply Wall St has no position in any of the stocks mentioned.

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