Caixa Seguridade Participações S.A. (BVMF:CXSE3) Looks Interesting, And It's About To Pay A Dividend

Caixa Seguridade Participações S.A. (BVMF:CXSE3) is about to trade ex-dividend in the next 4 days. The ex-dividend date generally occurs two days 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. It is important to be aware of the ex-dividend date because any trade on the stock needs to have been settled on or before the record date. In other words, investors can purchase Caixa Seguridade Participações' shares before the 4th of August in order to be eligible for the dividend, which will be paid on the 15th of August.

The company's next dividend payment will be R$0.31 per share. Last year, in total, the company distributed R$1.14 to shareholders. Last year's total dividend payments show that Caixa Seguridade Participações has a trailing yield of 8.4% on the current share price of R$13.70. If you buy this business for its dividend, you should have an idea of whether Caixa Seguridade Participações's dividend is reliable and sustainable. As a result, readers should always check whether Caixa Seguridade Participações has been able to grow its dividends, or if the dividend might be cut.

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If a company pays out more in dividends than it earned, then the dividend might become unsustainable - hardly an ideal situation. Its dividend payout ratio is 89% of profit, which means the company is paying out a majority of its earnings. The relatively limited profit reinvestment could slow the rate of future earnings growth. We'd be worried about the risk of a drop in earnings.

When a company paid out less in dividends than it earned in profit, this generally suggests its dividend is affordable. The lower the % of its profit that it pays out, the greater the margin of safety for the dividend if the business enters a downturn.

View our latest analysis for Caixa Seguridade Participações

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. That's why it's comforting to see Caixa Seguridade Participações's earnings have been skyrocketing, up 21% per annum for the past five years.

Another key way to measure a company's dividend prospects is by measuring its historical rate of dividend growth. Caixa Seguridade Participações has delivered 24% dividend growth per year on average over the past four years. Both per-share earnings and dividends have both been growing rapidly in recent times, which is great to see.

To Sum It Up

Is Caixa Seguridade Participações worth buying for its dividend? Caixa Seguridade Participações has an acceptable payout ratio and its earnings per share have been improving at a decent rate. We think this is a pretty attractive combination, and would be interested in investigating Caixa Seguridade Participações more closely.

In light of that, while Caixa Seguridade Participações has an appealing dividend, it's worth knowing the risks involved with this stock. For example - Caixa Seguridade Participações has 1 warning sign we think you should be aware of.

Generally, we wouldn't recommend just buying the first dividend stock you see. Here's a curated list of interesting stocks that are strong dividend payers.

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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.