Alpine Summit Energy Partners, Inc. (CVE:ALPS.U) is about to trade ex-dividend in the next 3 days. The ex-dividend date is usually set to be one business day before the record date which is the cut-off date on which you must be present on the company's books as a shareholder in order to receive the dividend. The ex-dividend date is important because any transaction on a stock needs to have been settled before the record date in order to be eligible for a dividend. In other words, investors can purchase Alpine Summit Energy Partners' shares before the 16th of August in order to be eligible for the dividend, which will be paid on the 31st of August.

The company's next dividend payment will be US$0.03 per share. Last year, in total, the company distributed US$0.36 to shareholders. Looking at the last 12 months of distributions, Alpine Summit Energy Partners has a trailing yield of approximately 6.9% on its current stock price of $5.2. If you buy this business for its dividend, you should have an idea of whether Alpine Summit Energy Partners's dividend is reliable and sustainable. So we need to check whether the dividend payments are covered, and if earnings are growing.

See our latest analysis for Alpine Summit Energy Partners

Dividends are typically paid out of company income, so if a company pays out more than it earned, its dividend is usually at a higher risk of being cut. Alpine Summit Energy Partners paid a dividend last year despite being unprofitable. This might be a one-off event, but it's not a sustainable state of affairs in the long run. 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. Alpine Summit Energy Partners paid a dividend despite reporting negative free cash flow over the last twelve months. This may be due to heavy investment in the business, but this is still suboptimal from a dividend sustainability perspective.

Click here to see how much of its profit Alpine Summit Energy Partners paid out over the last 12 months.

Have Earnings And Dividends Been Growing?

Stocks in companies that generate sustainable earnings growth often make the best dividend prospects, as it is easier to lift the dividend when earnings are rising. If earnings fall far enough, the company could be forced to cut its dividend. Alpine Summit Energy Partners was unprofitable last year, although, we can see that at least its loss per share reduced by 19% on the previous year.

We do note though, one year is too short a time to be drawing strong conclusions about a company's future growth prospects.

Unfortunately Alpine Summit Energy Partners has only been paying a dividend for a year or so, so there's not much of a history to draw insight from.

Get our latest analysis on Alpine Summit Energy Partners's balance sheet health here.

To Sum It Up

Is Alpine Summit Energy Partners an attractive dividend stock, or better left on the shelf? We're a bit uncomfortable with it paying a dividend while being loss-making, especially given that the dividend was not well covered by free cash flow. Overall it doesn't look like the most suitable dividend stock for a long-term buy and hold investor.

With that in mind though, if the poor dividend characteristics of Alpine Summit Energy Partners don't faze you, it's worth being mindful of the risks involved with this business. Our analysis shows 4 warning signs for Alpine Summit Energy Partners and you should be aware of these before buying any shares.

A common investing mistake is buying the first interesting stock you see. Here you can find a full list of high-yield dividend stocks.

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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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