Yahoo Finance Just Four Days Till Decisive Dividend Corporation (CVE:DE) Will Be Trading Ex-Dividend
Readers hoping to buy Decisive Dividend Corporation (CVE:DE) for its dividend will need to make their move shortly, as the stock is about to trade ex-dividend. The ex-dividend date is usually set to be one business day before the record date which is the cut-off date on which you must be present on the company's books as a shareholder in order to receive the 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. Therefore, if you purchase Decisive Dividend's shares on or after the 29th of July, you won't be eligible to receive the dividend, when it is paid on the 13th of August.
The company's upcoming dividend is CA$0.02 a share, following on from the last 12 months, when the company distributed a total of CA$0.24 per share to shareholders. Based on the last year's worth of payments, Decisive Dividend has a trailing yield of 6.5% on the current stock price of CA$3.67. We love seeing companies pay a dividend, but it's also important to be sure that laying the golden eggs isn't going to kill our golden goose! That's why we should always check whether the dividend payments appear sustainable, and if the company is growing.
See our latest analysis for Decisive Dividend
Dividends are typically paid from company earnings. If a company pays more in dividends than it earned in profit, then the dividend could be unsustainable. Decisive Dividend paid out more than half (55%) of its earnings last year, which is a regular payout ratio for most companies. A useful secondary check can be to evaluate whether Decisive Dividend generated enough free cash flow to afford its dividend. It paid out 2.8% of its free cash flow as dividends last year, which is conservatively low.
It's positive to see that Decisive Dividend's dividend is covered by both profits and cash flow, since this is generally a sign that the dividend is sustainable, and a lower payout ratio usually suggests a greater margin of safety before the dividend gets cut.
Click here to see how much of its profit Decisive Dividend paid out over the last 12 months.
Have Earnings And Dividends Been Growing?
Companies with falling earnings are riskier for dividend shareholders. If earnings fall far enough, the company could be forced to cut its dividend. Decisive Dividend's earnings per share have fallen at approximately 14% a year over the previous five years. Such a sharp decline casts doubt on the future sustainability of the dividend.
Another key way to measure a company's dividend prospects is by measuring its historical rate of dividend growth. Decisive Dividend's dividend payments are broadly unchanged compared to where they were six years ago. When earnings are declining yet the dividends are flat, typically the company is either paying out a higher portion of its earnings, or paying out of cash or debt on the balance sheet, neither of which is ideal.
To Sum It Up
Is Decisive Dividend an attractive dividend stock, or better left on the shelf? We're not enthused by the declining earnings per share, although at least the company's payout ratio is within a reasonable range, meaning it may not be at imminent risk of a dividend cut. Overall, it's not a bad combination, but we feel that there are likely more attractive dividend prospects out there.
If you're not too concerned about Decisive Dividend's ability to pay dividends, you should still be mindful of some of the other risks that this business faces. We've identified 5 warning signs with Decisive Dividend (at least 1 which is a bit concerning), and understanding them should be part of your investment process.
A common investment mistake is buying the first interesting stock you see. Here you can find a list of promising dividend stocks with a greater than 2% yield and an upcoming dividend.
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.
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