Readers hoping to buy Airtel Africa Plc (LON:AAF) 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 one business day 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 because any transaction on a stock needs to have been settled before the record date in order to be eligible for a dividend. Accordingly, Airtel Africa investors that purchase the stock on or after the 7th of November will not receive the dividend, which will be paid on the 13th of December.

The company's next dividend payment will be US$0.026 per share. Last year, in total, the company distributed US$0.062 to shareholders. Calculating the last year's worth of payments shows that Airtel Africa has a trailing yield of 4.7% on the current share price of UK￡1.026. Dividends are an important source of income to many shareholders, but the health of the business is crucial to maintaining those dividends. As a result, readers should always check whether Airtel Africa has been able to grow its dividends, or if the dividend might be cut.

Check out our latest analysis for Airtel Africa

Dividends are usually paid out of company profits, so if a company pays out more than it earned then its dividend is usually at greater risk of being cut. Airtel Africa reported a loss last year, so it's not great to see that it has continued paying a dividend. Considering the lack of profitability, we also need to check if the company generated enough cash flow to cover the dividend payment. If Airtel Africa didn't generate enough cash to pay the dividend, then it must have either paid from cash in the bank or by borrowing money, neither of which is sustainable in the long term. The good news is it paid out just 20% of its free cash flow in the last year.

Click here to see the company's payout ratio, plus analyst estimates of its future dividends.

Have Earnings And Dividends Been Growing?

Businesses with shrinking earnings are tricky from a dividend perspective. Investors love dividends, so if earnings fall and the dividend is reduced, expect a stock to be sold off heavily at the same time. Airtel Africa was unprofitable last year and, unfortunately, the general trend suggests its earnings have been in decline over the last five years, making us wonder if the dividend is sustainable at all.

Another key way to measure a company's dividend prospects is by measuring its historical rate of dividend growth. In the past five years, Airtel Africa has increased its dividend at approximately 0.6% a year on average.