It looks like Nucleus Software Exports Limited (NSE: NUCLEUS) is set to be ex-dividend within the next three days. The ex-dividend date is a business day before a company’s registration date, which is the date the company determines which shareholders are entitled to receive a dividend. The ex-dividend date is important because every time a stock is bought or sold, the transaction takes at least two business days to settle. Thus, you can buy Nucleus Software Exports shares before July 15 in order to receive the dividend that the company will pay on August 22.

The company’s next dividend payment will be 6.00 per share, and over the past 12 months, the company has paid a total of 6.00 per share. Looking at the last 12 months of distributions, Nucleus Software Exports has a rolling return of around 1.7% from its current price of 688.2. We love to see companies pay a dividend, but it’s also important to make sure that laying the golden eggs is not going to kill our goose that lays the golden eggs! That is why we should always check whether dividend payments seem sustainable and whether the business is growing.

Check out our latest analysis for Nucleus software exports

Dividends are usually paid out of the company’s profits, so if a company pays more than it earned, its dividend is usually at risk of being reduced. Nucleus Software Exports only pays 22% of its after-tax profits, which is comfortably low and leaves plenty of leeway in the event of adverse events. Yet cash flow is usually more important than earnings in assessing dividend sustainability, so we always need to check whether the company has generated enough cash to pay its dividend. It paid 7.8% of its free cash flow as dividends last year, which is conservative.

It is positive to see that Nucleus Software Exports’ dividend is covered by both earnings and cash flow, as this is usually a sign that the dividend is sustainable, and a lower payout ratio usually suggests a higher. margin of safety before the dividend is cut.

Click here to see how much of its Profit Nucleus Software Exports has paid in the past 12 months.

Have profits and dividends increased?

Stocks of companies that generate sustainable earnings growth often offer the best dividend prospects because it’s easier to raise the dividend when earnings rise. 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 heartwarming to see that Nucleus Software Exports’ profits have skyrocketed, rising 32% annually for the past five years. Nucleus Software Exports looks like a true growth company, with earnings per share growing at a breakneck pace and the company reinvesting most of its profits back into the business.

Another key way to measure a company’s dividend outlook is to measure its historical rate of dividend growth. Nucleus Software Exports has generated dividend growth of 17% per year on average over the past 10 years. It’s great to see earnings per share increasing rapidly over several years, and dividends per share increasing at the same time.

Last takeaways

Is Nucleus Software Exports an attractive dividend-paying stock, or better off, just left on the shelf? It’s great that Nucleus Software Exports is increasing its earnings per share while simultaneously paying out a small percentage of its earnings and cash flow. It’s disappointing that the dividend has been cut at least once in the past, but as it stands, the low payout ratio suggests a conservative approach to dividends, which we like. Overall, we think this is an attractive combination worthy of further research.

So while Nucleus Software Exports looks good from a dividend standpoint, it’s still worth being aware of the risks involved in this title. In terms of investment risks, we have identified 2 warning signs with Nucleus Software Exports and understanding them should be part of your investment process.

However, we don’t recommend simply buying the first dividend stock you see. Here is a list of interesting dividend paying stocks with a yield above 2% and a dividend coming soon.

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