Ninety One Group (LON:N91) stock is about to trade ex-dividend in three 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 an important date to be aware of as any purchase of the stock made on or after this date might mean a late settlement that doesn't show on the record date. In other words, investors can purchase Ninety One Group's shares before the 18th of July in order to be eligible for the dividend, which will be paid on the 8th of August.

The company's next dividend payment will be UK￡0.064 per share, and in the last 12 months, the company paid a total of UK￡0.12 per share. Looking at the last 12 months of distributions, Ninety One Group has a trailing yield of approximately 7.0% on its current stock price of UK￡1.765. 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 Ninety One Group can afford its dividend, and if the dividend could grow.

See our latest analysis for Ninety One Group

If a company pays out more in dividends than it earned, then the dividend might become unsustainable - hardly an ideal situation. Ninety One Group paid out 67% of its earnings to investors last year, a normal payout level for most businesses.

When a company paid out less in dividends than it earned in profit, this generally suggests its dividend is affordable. The lower the % of its profit that it pays out, the greater the margin of safety for the dividend if the business enters a downturn.

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

Have Earnings And Dividends Been Growing?

Stocks in companies that generate sustainable earnings growth often make the best dividend prospects, as it is easier to lift the dividend when earnings are rising. If business enters a downturn and the dividend is cut, the company could see its value fall precipitously. With that in mind, we're encouraged by the steady growth at Ninety One Group, with earnings per share up 3.8% on average over the last five years.

Many investors will assess a company's dividend performance by evaluating how much the dividend payments have changed over time. In the past four years, Ninety One Group has increased its dividend at approximately 1.0% a year on average.

Final Takeaway

Is Ninety One Group an attractive dividend stock, or better left on the shelf? Ninety One Group has been generating some growth in earnings per share while paying out more than half of its earnings to shareholders in the form of dividends. In sum this is a middling combination, and we find it hard to get excited about the company from a dividend perspective.