Regular readers will know that we love our dividends at Simply Wall St, which is why it's exciting to see iEnergizer Limited (LON:IBPO) is about to trade ex-dividend in the next 3 days. This means that investors who purchase shares on or after the 22nd of November will not receive the dividend, which will be paid on the 20th of December.

iEnergizer's next dividend payment will be UK£0.052 per share, and in the last 12 months, the company paid a total of UK£0.13 per share. Based on the last year's worth of payments, iEnergizer has a trailing yield of 3.5% on the current stock price of £2.75. If you buy this business for its dividend, you should have an idea of whether iEnergizer's dividend is reliable and sustainable. So we need to check whether the dividend payments are covered, and if earnings are growing.

Check out our latest analysis for iEnergizer

If a company pays out more in dividends than it earned, then the dividend might become unsustainable - hardly an ideal situation. iEnergizer paid out 72% of its earnings to investors last year, a normal payout level for most businesses. Yet cash flows are even more important than profits for assessing a dividend, so we need to see if the company generated enough cash to pay its distribution. It paid out more than half (51%) of its free cash flow in the past year, which is within an average range for most companies.

It's encouraging to see that the dividend is covered by both profit and cash flow. This generally suggests the dividend is sustainable, as long as earnings don't drop precipitously.

Click here to see how much of its profit iEnergizer 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 earnings decline and the company is forced to cut its dividend, investors could watch the value of their investment go up in smoke. With that in mind, we're encouraged by the steady growth at iEnergizer, with earnings per share up 8.5% on average over the last five years. While earnings have been growing at a credible rate, the company is paying out a majority of its earnings to shareholders. Therefore it's unlikely that the company will be able to reinvest heavily in its business, which could presage slower growth in the future.

Many investors will assess a company's dividend performance by evaluating how much the dividend payments have changed over time. iEnergizer's dividend payments are effectively flat on where they were seven years ago.

To Sum It Up

Has iEnergizer got what it takes to maintain its dividend payments? Earnings per share growth has been unremarkable, and while the company is paying out a majority of its earnings and cash flow in the form of dividends, the dividend payments don't appear excessive. While it does have some good things going for it, we're a bit ambivalent and it would take more to convince us of iEnergizer's dividend merits.

Curious about whether iEnergizer 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 dividend stocks, we recommend checking our list of top dividend stocks with a greater than 2% yield and an upcoming dividend.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.