Readers hoping to buy Octopus Renewables Infrastructure Trust plc (LON:ORIT) for its dividend will need to make their move shortly, as the stock is about to trade ex-dividend. The ex-dividend date is one business day before a company's record date, which is the date on which the company determines which shareholders are entitled 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. Accordingly, Octopus Renewables Infrastructure Trust investors that purchase the stock on or after the 16th of November will not receive the dividend, which will be paid on the 1st of December.

The company's next dividend payment will be UK￡0.015 per share, on the back of last year when the company paid a total of UK￡0.058 to shareholders. Looking at the last 12 months of distributions, Octopus Renewables Infrastructure Trust has a trailing yield of approximately 6.4% on its current stock price of ￡0.909. If you buy this business for its dividend, you should have an idea of whether Octopus Renewables Infrastructure Trust's dividend is reliable and sustainable. So we need to investigate whether Octopus Renewables Infrastructure Trust can afford its dividend, and if the dividend could grow.

View our latest analysis for Octopus Renewables Infrastructure Trust

Dividends are typically paid from company earnings. If a company pays more in dividends than it earned in profit, then the dividend could be unsustainable. Octopus Renewables Infrastructure Trust paid out a disturbingly high 281% of its profit as dividends last year, which makes us concerned there's something we don't fully understand in the business.

When the dividend payout ratio is high, as it is in this case, the dividend is usually at greater risk of being cut in the future.

Click here to see how much of its profit Octopus Renewables Infrastructure Trust paid out over the last 12 months.

Have Earnings And Dividends Been Growing?

When earnings decline, dividend companies become much harder to analyse and own safely. Investors love dividends, so if earnings fall and the dividend is reduced, expect a stock to be sold off heavily at the same time. From this perspective it's somewhat discouraging that earnings per share are down 2.3% but we'd note that investment in future growth can cause a similar impact.

We'd also point out that Octopus Renewables Infrastructure Trust issued a meaningful number of new shares in the past year. Trying to grow the dividend while issuing large amounts of new shares reminds us of the ancient Greek tale of Sisyphus - perpetually pushing a boulder uphill.