Carlton Investments Limited (ASX:CIN) is about to trade ex-dividend in the next four days. 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. Accordingly, Carlton Investments investors that purchase the stock on or after the 28th of February will not receive the dividend, which will be paid on the 20th of March.
The company’s next dividend payment will be AU$0.49 per share. Last year, in total, the company distributed AU$0.84 to shareholders. Last year’s total dividend payments show that Carlton Investments has a trailing yield of 2.7% on the current share price of A$31.65. If you buy this business for its dividend, you should have an idea of whether Carlton Investments’s dividend is reliable and sustainable. We need to see whether the dividend is covered by earnings and if it’s growing.
View our latest analysis for Carlton Investments
If a company pays out more in dividends than it earned, then the dividend might become unsustainable – hardly an ideal situation. Carlton Investments paid out more than half (60%) of its earnings last year, which is a regular payout ratio for most companies.
Companies that pay out less in dividends than they earn in profits generally have more sustainable dividends. The lower the payout ratio, the more wiggle room the business has before it could be forced to cut the dividend.
Click here to see how much of its profit Carlton Investments paid out over the last 12 months.
Have Earnings And Dividends Been Growing?
Stocks with flat earnings can still be attractive dividend payers, but it is important to be more conservative with your approach and demand a greater margin for safety when it comes to dividend sustainability. If business enters a downturn and the dividend is cut, the company could see its value fall precipitously. That explains why we’re not overly excited about Carlton Investments’s flat earnings over the past five years. We’d take that over an earnings decline any day, but in the long run, the best dividend stocks all grow their earnings per share.
Many investors will assess a company’s dividend performance by evaluating how much the dividend payments have changed over time. It looks like the Carlton Investments dividends are largely the same as they were 10 years ago.
To Sum It Up
Has Carlton Investments got what it takes to maintain its dividend payments? Earnings per share have not grown at all, and the company pays out a bit over half its profits to shareholders. Carlton Investments doesn’t appear to have a lot going for it, and we’re not inclined to take a risk on owning it for the dividend.
With that being said, if you’re still considering Carlton Investments as an investment, you’ll find it beneficial to know what risks this stock is facing. For example, Carlton Investments has 2 warning signs (and 1 which is concerning) we think 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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