Yahoo Finance 4 Days Left Before Commercial Metals Company (NYSE:CMC) Will Be Trading Ex-Dividend,
Shares of Commercial Metals Company (NYSE:CMC) will begin trading ex-dividend in 4 days. To qualify for the dividend check of US$0.12 per share, investors must have owned the shares prior to 06 November 2018, which is the last day the company’s management will finalize their list of shareholders to which they will send dividend payments. Investors looking for higher income-generating stocks to add to their portfolio should keep reading, as I take a deeper dive into Commercial Metals’s latest financial data to analyse its dividend attributes.
Check out our latest analysis for Commercial Metals
5 questions I ask before picking a dividend stock
If you are a dividend investor, you should always assess these five key metrics:
Is its annual yield among the top 25% of dividend-paying companies?
Has its dividend been stable over the past (i.e. no missed payments or significant payout cuts)?
Has it increased its dividend per share amount over the past?
Can it afford to pay the current rate of dividends from its earnings?
Will it have the ability to keep paying its dividends going forward?
Does Commercial Metals pass our checks?
Commercial Metals has a trailing twelve-month payout ratio of 41%, meaning the dividend is sufficiently covered by earnings. In the near future, analysts are predicting lower payout ratio of 23%, leading to a dividend yield of 2.7%. However, EPS should increase to $1.98, meaning that the lower payout ratio does not necessarily implicate a lower dividend payment.
When thinking about whether a dividend is sustainable, another factor to consider is the cash flow. Cash flow is important because companies with strong cash flow can usually sustain higher payout ratios.
If there is one thing that you want to be reliable in your life, it’s dividend stocks and their constant income stream. The reality facing CMC investors is that whilst it has continued to pay shareholders dividend, there has not been any increase in the level of dividends paid in the past decade. However, income investors that value stability over growth may still find CMC appealing.
Relative to peers, Commercial Metals produces a yield of 2.7%, which is high for Metals and Mining stocks but still below the market’s top dividend payers.
Next Steps:
With this in mind, I definitely rank Commercial Metals as a strong dividend stock, and makes it worth further research for anyone who likes steady income generation from their portfolio. Given that this is purely a dividend analysis, I urge potential investors to try and get a good understanding of the underlying business and its fundamentals before deciding on an investment. Below, I’ve compiled three important aspects you should look at:
Future Outlook: What are well-informed industry analysts predicting for CMC’s future growth? Take a look at our free research report of analyst consensus for CMC’s outlook.
Valuation: What is CMC worth today? Even if the stock is a cash cow, it’s not worth an infinite price. The intrinsic value infographic in our free research report helps visualize whether CMC is currently mispriced by the market.
Other Dividend Rockstars: Are there better dividend payers with stronger fundamentals out there? Check out our free list of these great stocks here.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.
