Yahoo Finance CoreLogic, Inc. (NYSE:CLGX) Looks Like A Good Stock, And It's Going Ex-Dividend Soon
Readers hoping to buy CoreLogic, Inc. (NYSE:CLGX) for its dividend will need to make their move shortly, as the stock is about to trade ex-dividend. Investors can purchase shares before the 29th of May in order to be eligible for this dividend, which will be paid on the 15th of June.
CoreLogic's upcoming dividend is US$0.22 a share, following on from the last 12 months, when the company distributed a total of US$0.88 per share to shareholders. Calculating the last year's worth of payments shows that CoreLogic has a trailing yield of 1.9% on the current share price of $47.19. Dividends are a major contributor to investment returns for long term holders, but only if the dividend continues to be paid. So we need to investigate whether CoreLogic can afford its dividend, and if the dividend could grow.
Check out our latest analysis for CoreLogic
If a company pays out more in dividends than it earned, then the dividend might become unsustainable - hardly an ideal situation. Fortunately CoreLogic's payout ratio is modest, at just 35% of profit. That said, even highly profitable companies sometimes might not generate enough cash to pay the dividend, which is why we should always check if the dividend is covered by cash flow. Luckily it paid out just 6.0% of its free cash flow last year.
It's encouraging to see that the dividend is covered by both profit and cash flow. This generally suggests the dividend is sustainable, as long as earnings don't drop precipitously.
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. Investors love dividends, so if earnings fall and the dividend is reduced, expect a stock to be sold off heavily at the same time. With that in mind, we're encouraged by the steady growth at CoreLogic, with earnings per share up 4.7% on average over the last five years. Recent growth has not been impressive. However, companies that see their growth slow can often choose to pay out a greater percentage of earnings to shareholders, which could see the dividend continue to rise.
This is CoreLogic's first year of paying a dividend, so it doesn't have much of a history yet to compare to.
Final Takeaway
Is CoreLogic worth buying for its dividend? Earnings per share have been growing moderately, and CoreLogic is paying out less than half its earnings and cash flow as dividends, which is an attractive combination as it suggests the company is investing in growth. It might be nice to see earnings growing faster, but CoreLogic is being conservative with its dividend payouts and could still perform reasonably over the long run. CoreLogic looks solid on this analysis overall, and we'd definitely consider investigating it more closely.
In light of that, while CoreLogic has an appealing dividend, it's worth knowing the risks involved with this stock. To help with this, we've discovered 4 warning signs for CoreLogic that you should be aware of before investing in their shares.
If you're in the market for dividend stocks, we recommend checking our list of top dividend stocks with a greater than 2% yield and an upcoming dividend.
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This article by Simply Wall St is general in nature. 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. Thank you for reading.
