Unlock the Secrets: 3 Must-Do Checks Before Investing in Harbour Energy plc for its Anticipated Dividend

2023-09-04 05:15:38

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3 Important Checks to Make Before Investing in Harbour Energy plc (LON:HBR) for its Upcoming Dividend

Investors looking to buy shares of Harbour Energy plc (LON:HBR) in anticipation of its upcoming dividend need to consider a few key factors. Firstly, it is crucial to be aware of the ex-dividend date, which is the date that determines the shareholders eligible to receive the dividend. Any purchases made after this date will not be eligible for the dividend payment. Therefore, if you buy Harbour Energy shares on or after September 7th, you will not receive the dividend, which is scheduled to be paid on October 18th.

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Harbour Energy's next dividend payment is projected to be US$0.12 per share. Last year, the company paid a total dividend of US$0.24 per share, resulting in a trailing yield of 7.5% based on the current share price of £2.536. However, it is important to examine whether Harbour Energy's dividend is sustainable and reliable. Investors should assess whether the company has managed to grow its dividends in recent years or if there is a possibility of a dividend cut.

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Evaluating Earnings and Dividend Growth

The sustainability of dividends depends on a company's profitability. If a company pays out more in dividends than it earns in profit, the dividend may not be sustainable. Harbour Energy paid a dividend last year despite being unprofitable, indicating a potentially unsustainable situation. In addition to profitability, it is essential to analyze the company's cash flow to ensure it can cover the dividend payment. Harbour Energy disbursed only 9.1% of its free cash flow towards dividends last year, which indicates a relatively healthy cash flow position.

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Investment Risks and That's our round-up

Harbour Energy's earnings have been declining over the past five years, raising concerns about the sustainability of its dividend. It is important to note that Harbour Energy has a relatively short dividend history, making it difficult to assess its long-term sustainability. Investors can gain a clearer picture of the company's financial health by checking our visualisation of its financial health here.

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Although Harbour Energy may not be an attractive dividend stock due to its recent loss-making and declining earnings, it is essential to acknowledge the risks associated with this investment. We have identified one warning sign with Harbour Energy that investors should consider in their decision-making process. As always, it is advisable to research and evaluate other strong dividend-paying stocks before making an investment decision.

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