Yahoo Finance Corus Entertainment Inc. (TSE:CJR.B) Pays A CA$0.03 Dividend In Just Four Days
Corus Entertainment Inc. (TSE:CJR.B) is about to trade 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 an important date to be aware of as any purchase of the stock made on or after this date might mean a late settlement that doesn't show on the record date. Accordingly, Corus Entertainment investors that purchase the stock on or after the 28th of July will not receive the dividend, which will be paid on the 15th of August.
The company's next dividend payment will be CA$0.03 per share, and in the last 12 months, the company paid a total of CA$0.12 per share. Based on the last year's worth of payments, Corus Entertainment stock has a trailing yield of around 7.9% on the current share price of CA$1.52. Dividends are a major contributor to investment returns for long term holders, but only if the dividend continues to be paid. We need to see whether the dividend is covered by earnings and if it's growing.
View our latest analysis for Corus Entertainment
Dividends are usually paid out of company profits, so if a company pays out more than it earned then its dividend is usually at greater risk of being cut. Corus Entertainment lost money last year, so the fact that it's paying a dividend is certainly disconcerting. There might be a good reason for this, but we'd want to look into it further before getting comfortable. Given that the company reported a loss last year, we now need to see if it generated enough free cash flow to fund the 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. Thankfully its dividend payments took up just 35% of the free cash flow it generated, which is a comfortable payout ratio.
Click here to see the company's payout ratio, plus analyst estimates of its future dividends.
Have Earnings And Dividends Been Growing?
Stocks in companies that generate sustainable earnings growth often make the best dividend prospects, as it is easier to lift the dividend when earnings are rising. If business enters a downturn and the dividend is cut, the company could see its value fall precipitously. Corus Entertainment was unprofitable last year, but at least the general trend suggests its earnings have been improving over the past five years. Even so, an unprofitable company whose business does not quickly recover is usually not a good candidate for dividend investors.
Many investors will assess a company's dividend performance by evaluating how much the dividend payments have changed over time. Corus Entertainment's dividend payments per share have declined at 19% per year on average over the past 10 years, which is uninspiring.
Remember, you can always get a snapshot of Corus Entertainment's financial health, by checking our visualisation of its financial health, here.
The Bottom Line
Should investors buy Corus Entertainment for the upcoming dividend? We're a bit uncomfortable with it paying a dividend while being loss-making. However, we note that the dividend was covered by cash flow. Overall, it's hard to get excited about Corus Entertainment from a dividend perspective.
While it's tempting to invest in Corus Entertainment for the dividends alone, you should always be mindful of the risks involved. Every company has risks, and we've spotted 1 warning sign for Corus Entertainment you should know about.
A common investing mistake is buying the first interesting stock you see. Here you can find a full list of high-yield dividend stocks.
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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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