Apollo Global Management, Inc. (NYSE:APO) stock is about to trade ex-dividend in three 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 Apollo Global Management's shares before the 19th of May in order to be eligible for the dividend, which will be paid on the 29th of May.

The company's next dividend payment will be US$0.5625 per share. Last year, in total, the company distributed US$2.25 to shareholders. Last year's total dividend payments show that Apollo Global Management has a trailing yield of 1.7% on the current share price of US$135.52. Dividends are an important source of income to many shareholders, but the health of the business is crucial to maintaining those dividends. So we need to investigate whether Apollo Global Management can afford its dividend, and if the dividend could grow.

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. Last year, Apollo Global Management paid out 107% of its income as dividends, which is above a level that we're comfortable with, especially if the company needs to reinvest in its 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 the company's payout ratio, plus analyst estimates of its future dividends.

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 fall far enough, the company could be forced to cut its dividend. It's encouraging to see Apollo Global Management has grown its earnings rapidly, up 35% a year for the past five years.

Another key way to measure a company's dividend prospects is by measuring its historical rate of dividend growth. Apollo Global Management has delivered 3.0% dividend growth per year on average over the past 10 years. Earnings per share have been growing much quicker than dividends, potentially because Apollo Global Management is keeping back more of its profits to grow the business.

The Bottom Line

Is Apollo Global Management an attractive dividend stock, or better left on the shelf? It's been growing earnings per share at a pleasant rate, although its dividend payout was not well covered by earnings. We think there are likely better opportunities out there.

With that being said, if dividends aren't your biggest concern with Apollo Global Management, you should know about the other risks facing this business.

Generally, we wouldn't recommend just buying the first dividend stock you see. Here's a curated list of interesting stocks that are strong dividend payers.

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.