Regular readers will know that we love our dividends at Simply Wall St, which is why it's exciting to see B. Riley Financial, Inc. (NASDAQ:RILY) is about to trade ex-dividend in the next four 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. It is important to be aware of the ex-dividend date because any trade on the stock needs to have been settled on or before the record date. In other words, investors can purchase B. Riley Financial's shares before the 10th of August in order to be eligible for the dividend, which will be paid on the 23rd of August.

The company's next dividend payment will be US$1.00 per share. Last year, in total, the company distributed US$4.00 to shareholders. Based on the last year's worth of payments, B. Riley Financial stock has a trailing yield of around 7.2% on the current share price of $55.73. Dividends are an important source of income to many shareholders, but the health of the business is crucial to maintaining those dividends. That's why we should always check whether the dividend payments appear sustainable, and if the company is growing.

View our latest analysis for B. Riley Financial

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. B. Riley Financial reported a loss last year, so it's not great to see that it has continued paying a dividend.

Click here to see how much of its profit B. Riley Financial paid out over the last 12 months.

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 business enters a downturn and the dividend is cut, the company could see its value fall precipitously. B. Riley Financial reported a loss last year, but at least the general trend suggests its income has been improving over the past five years. Even so, an unprofitable company whose business does not quickly recover is usually not a good candidate for dividend investors.

Another key way to measure a company's dividend prospects is by measuring its historical rate of dividend growth. In the past eight years, B. Riley Financial has increased its dividend at approximately 55% a year on average. Both per-share earnings and dividends have both been growing rapidly in recent times, which is great to see.

Remember, you can always get a snapshot of B. Riley Financial's financial health, by checking our visualisation of its financial health, here.

Final Takeaway

Is B. Riley Financial an attractive dividend stock, or better left on the shelf? We're uncomfortable with the fact that B. Riley Financial paid a dividend while being loss-making. At best we would put it on a watch-list to see if business conditions improve, as it doesn't look like a clear opportunity right now.

With that being said, if dividends aren't your biggest concern with B. Riley Financial, you should know about the other risks facing this business. For instance, we've identified 3 warning signs for B. Riley Financial (1 shouldn't be ignored) you should be aware of.

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.