Regular readers will know that we love our dividends at Simply Wall St, which is why it's exciting to see Excelsior Capital Limited (ASX:ECL) is about to trade ex-dividend in the next 2 days. The ex-dividend date is commonly two business days 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 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. Therefore, if you purchase Excelsior Capital's shares on or after the 1st of April, you won't be eligible to receive the dividend, when it is paid on the 20th of April.

The company's next dividend payment will be AU$0.3449 per share. Last year, in total, the company distributed AU$0.08 to shareholders. Looking at the last 12 months of distributions, Excelsior Capital has a trailing yield of approximately 6.3% on its current stock price of AU$1.26. Dividends are an important source of income to many shareholders, but the health of the business is crucial to maintaining those dividends. We need to see whether the dividend is covered by earnings and if it's growing.

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If a company pays out more in dividends than it earned, then the dividend might become unsustainable - hardly an ideal situation. Excelsior Capital reported a loss after tax last year, which means it's paying a dividend despite being unprofitable. While this might be a one-off event, this is unlikely to be sustainable in the long term. With the recent loss, it's important to check if the business generated enough cash to pay its dividend. If cash earnings don't cover the dividend, the company would have to pay dividends out of cash in the bank, or by borrowing money, neither of which is long-term sustainable.

View our latest analysis for Excelsior Capital

Click here to see how much of its profit Excelsior Capital paid out over the last 12 months.ASX:ECL Historic Dividend March 29th 2026

Have Earnings And Dividends Been Growing?

Businesses with strong growth prospects usually make the best dividend payers, because it's easier to grow dividends when earnings per share are improving. If business enters a downturn and the dividend is cut, the company could see its value fall precipitously. Excelsior Capital 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.

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The main way most investors will assess a company's dividend prospects is by checking the historical rate of dividend growth. Excelsior Capital's dividend payments per share have declined at 4.0% per year on average over the past 10 years, which is uninspiring.

We update our analysis on Excelsior Capital every 24 hours, so you can always get the latest insights on its financial health, here.

To Sum It Up

Is Excelsior Capital an attractive dividend stock, or better left on the shelf? First, it's not great to see the company paying a dividend despite being loss-making over the last year. Second, the dividend was not well covered by cash flow." Bottom line: Excelsior Capital has some unfortunate characteristics that we think could lead to sub-optimal outcomes for dividend investors.

With that being said, if you're still considering Excelsior Capital as an investment, you'll find it beneficial to know what risks this stock is facing. For example, Excelsior Capital has 4 warning signs (and 2 which are potentially serious) we think you should know about.

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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.

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