It looks like Neenah, Inc. (NYSE:NP) is about to go ex-dividend in the next 4 days. The ex-dividend date occurs one day before the record date which is the day on which shareholders need to be on the company's books in order to receive a dividend. The ex-dividend date is important as the process of settlement involves two full business days. So if you miss that date, you would not show up on the company's books on the record date. Meaning, you will need to purchase Neenah's shares before the 17th of February to receive the dividend, which will be paid on the 2nd of March.

The company's next dividend payment will be US$0.47 per share, on the back of last year when the company paid a total of US$1.90 to shareholders. Based on the last year's worth of payments, Neenah stock has a trailing yield of around 4.0% on the current share price of $47.43. Dividends are an important source of income to many shareholders, but the health of the business is crucial to maintaining those dividends. As a result, readers should always check whether Neenah has been able to grow its dividends, or if the dividend might be cut.

Check out our latest analysis for Neenah

If a company pays out more in dividends than it earned, then the dividend might become unsustainable - hardly an ideal situation. Neenah 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. Neenah paid out more free cash flow than it generated - 117%, to be precise - last year, which we think is concerningly high. We're curious about why the company paid out more cash than it generated last year, since this can be one of the early signs that a dividend may be unsustainable.

Click here to see the company's payout ratio, plus analyst estimates of its future dividends.

Have Earnings And Dividends Been Growing?

Companies with falling earnings are riskier for dividend shareholders. Investors love dividends, so if earnings fall and the dividend is reduced, expect a stock to be sold off heavily at the same time. Neenah reported a loss last year, and the general trend suggests its earnings have also been declining in recent years, making us wonder if the dividend is at risk.

Another key way to measure a company's dividend prospects is by measuring its historical rate of dividend growth. Neenah has delivered an average of 16% per year annual increase in its dividend, based on the past 10 years of dividend payments.