C-Com Satellite Systems (CVE:CMI) Has Re-Affirmed Its Dividend Of CA$0.013

C-Com Satellite Systems Inc. (CVE:CMI) will pay a dividend of CA$0.013 on the 16th of November. This means the dividend yield will be fairly typical at 2.0%.

See our latest analysis for C-Com Satellite Systems

C-Com Satellite Systems Doesn't Earn Enough To Cover Its Payments

We like to see a healthy dividend yield, but that is only helpful to us if the payment can continue. Prior to this announcement, the company was paying out 138% of what it was earning and 85% of cash flows. The company could be more focused on returning cash to shareholders, but this could indicate that growth opportunities are few and far between.

EPS is set to grow by 10.8% over the next year if recent trends continue. However, if the dividend continues growing along recent trends, it could start putting pressure on the balance sheet with the payout ratio reaching 127% over the next year.

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C-Com Satellite Systems Doesn't Have A Long Payment History

The dividend's track record has been pretty solid, but with only 9 years of history we want to see a few more years of history before making any solid conclusions. The first annual payment during the last 9 years was CA$0.03 in 2012, and the most recent fiscal year payment was CA$0.05. This works out to be a compound annual growth rate (CAGR) of approximately 5.8% a year over that time. Investors will likely want to see a longer track record of growth before making decision to add this to their income portfolio.

C-Com Satellite Systems Might Find It Hard To Grow Its Dividend

Investors who have held shares in the company for the past few years will be happy with the dividend income they have received. C-Com Satellite Systems has seen EPS rising for the last five years, at 11% per annum. However, the payout ratio is very high, not leaving much room for growth of the dividend in the future.

C-Com Satellite Systems' Dividend Doesn't Look Sustainable

Overall, we don't think this company makes a great dividend stock, even though the dividend wasn't cut this year. While we generally think the level of distributions are a bit high, we wouldn't rule it out as becoming a good dividend payer in the future as its earnings are growing healthily. We would be a touch cautious of relying on this stock primarily for the dividend income.

It's important to note that companies having a consistent dividend policy will generate greater investor confidence than those having an erratic one. At the same time, there are other factors our readers should be conscious of before pouring capital into a stock. For instance, we've picked out 6 warning signs for C-Com Satellite Systems that investors should take into consideration. If you are a dividend investor, you might also want to look at our curated list of high performing dividend stock.

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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