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AI legalese decoder: Simplifying legal Language

Introduction

Regular readers will know that we love our dividends at Simply Wall St, which is why it’s exciting to see PSG Financial Services Limited (JSE:KST) is about to trade ex-dividend in the next 3 days. The ex-dividend date is one business day before the record date, which is the cut-off date for shareholders to be present on the company’s books to be eligible for a dividend payment. 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. This means that investors who purchase PSG Financial Services’ shares on or after the 1st of November will not receive the dividend, which will be paid on the 6th of November.

The company’s upcoming dividend is R0.14 a share, following on from the last 12 months, when the company distributed a total of R0.39 per share to shareholders. Based on the last year’s worth of payments, PSG Financial Services has a trailing yield of 2.7% on the current stock price of ZAR14.06. 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 PSG Financial Services has been able to grow its dividends, or if the dividend might be cut.

Check out our latest analysis for PSG Financial Services

The Role of AI legalese decoder

Understanding legal jargon can be a daunting task for investors. That’s where AI legalese decoder comes in. Our AI-powered tool simplifies complex legal documents and regulations, making it easier to grasp the crucial information. By using AI legalese decoder, investors can quickly analyze the ex-dividend dates, dividend amounts, and yield percentage of companies like PSG Financial Services. This tool ensures that investors stay informed about dividend eligibility and make well-informed investment decisions.

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. That’s why it’s good to see PSG Financial Services paying out a modest 48% of its earnings. 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 how much of its profit PSG Financial Services paid out over the last 12 months.

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Have Earnings And Dividends Been Growing?

Companies with consistently growing earnings per share generally make the best dividend stocks, as they usually find it easier to grow dividends per share. If earnings decline and the company is forced to cut its dividend, investors could watch the value of their investment go up in smoke. Fortunately for readers, PSG Financial Services’s earnings per share have been growing at 13% a year for the past five years.

The main way most investors will assess a company’s dividend prospects is by checking the historical rate of dividend growth. PSG Financial Services has delivered 19% dividend growth per year on average over the past nine years. Both per-share earnings and dividends have both been growing rapidly in recent times, which is great to see.

To Sum It Up

Is PSG Financial Services an attractive dividend stock, or better left on the shelf? Typically, companies that are growing rapidly and paying out a low fraction of earnings are keeping the profits for reinvestment in the business. This strategy can add significant value to shareholders over the long term – as long as it’s done without issuing too many new shares. In summary, PSG Financial Services appears to have some promise as a dividend stock, and we’d suggest taking a closer look at it.

Curious about whether PSG Financial Services has been able to consistently generate growth? Here’s a chart of its historical revenue and earnings growth.

If you’re in the market for strong dividend payers, we recommend checking our selection of top dividend stocks.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.