Interested In Corporación Moctezuma. de's (BMV:CMOCTEZ) Upcoming Mex$3.00 Dividend? You Have Two Days Left

Readers hoping to buy Corporación Moctezuma, S.A.B. de C.V. (BMV:CMOCTEZ) for its dividend will need to make their move shortly, as the stock is about to trade ex-dividend. The ex-dividend date is one business day before the record date, which is the cut-off date for shareholders to be present on the company's books to be eligible for a dividend payment. 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 Corporación Moctezuma. de's shares on or after the 16th of April, you won't be eligible to receive the dividend, when it is paid on the 18th of April.

The company's next dividend payment will be Mex$3.00 per share, and in the last 12 months, the company paid a total of Mex$4.00 per share. Based on the last year's worth of payments, Corporación Moctezuma. de has a trailing yield of 5.3% on the current stock price of Mex$75.50. 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! We need to see whether the dividend is covered by earnings and if it's growing.

See our latest analysis for Corporación Moctezuma. de

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. Corporación Moctezuma. de is paying out an acceptable 61% of its profit, a common payout level among most companies. Yet cash flow is typically more important than profit for assessing dividend sustainability, so we should always check if the company generated enough cash to afford its dividend. It paid out more than half (61%) of its free cash flow in the past year, which is within an average range for most companies.

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 how much of its profit Corporación Moctezuma. de paid out over the last 12 months.

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 earnings decline and the company is forced to cut its dividend, investors could watch the value of their investment go up in smoke. With that in mind, we're encouraged by the steady growth at Corporación Moctezuma. de, with earnings per share up 7.8% on average over the last five years. While earnings have been growing at a credible rate, the company is paying out a majority of its earnings to shareholders. If management lifts the payout ratio further, we'd take this as a tacit signal that the company's growth prospects are slowing.

Another key way to measure a company's dividend prospects is by measuring its historical rate of dividend growth. It looks like the Corporación Moctezuma. de dividends are largely the same as they were 10 years ago.

To Sum It Up

Is Corporación Moctezuma. de worth buying for its dividend? Earnings per share have been growing modestly and Corporación Moctezuma. de paid out a bit over half of its earnings and free cash flow last year. In summary, it's hard to get excited about Corporación Moctezuma. de from a dividend perspective.

With that being said, if dividends aren't your biggest concern with Corporación Moctezuma. de, you should know about the other risks facing this business. For example, Corporación Moctezuma. de has 2 warning signs (and 1 which shouldn't be ignored) 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.