Administradora Americana de Inversiones S.A. (SNSE:AAISA) Stock Goes Ex-Dividend In Just Three Days

Regular readers will know that we love our dividends at Simply Wall St, which is why it's exciting to see Administradora Americana de Inversiones S.A. (SNSE:AAISA) is about to trade ex-dividend in the next 3 days. The ex-dividend date is one business day before a company's record date, which is the date on which the company determines which shareholders are entitled to receive a 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, Administradora Americana de Inversiones investors that purchase the stock on or after the 13th of May will not receive the dividend, which will be paid on the 17th of May.

The company's next dividend payment will be CL$10.00 per share, and in the last 12 months, the company paid a total of CL$10.00 per share. Based on the last year's worth of payments, Administradora Americana de Inversiones stock has a trailing yield of around 5.2% on the current share price of CL$193.97. Dividends are an important source of income to many shareholders, but the health of the business is crucial to maintaining those dividends. We need to see whether the dividend is covered by earnings and if it's growing.

Check out our latest analysis for Administradora Americana de Inversiones

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. That's why it's good to see Administradora Americana de Inversiones paying out a modest 34% of its earnings.

Generally speaking, the lower a company's payout ratios, the more resilient its dividend usually is.

Click here to see how much of its profit Administradora Americana de Inversiones paid out over the last 12 months.

Have Earnings And Dividends Been Growing?

When earnings decline, dividend companies become much harder to analyse and own safely. If earnings decline and the company is forced to cut its dividend, investors could watch the value of their investment go up in smoke. From this viewpoint, it's unfortunate that earnings per share have declined 7.8% over the last year.

The main way most investors will assess a company's dividend prospects is by checking the historical rate of dividend growth. Administradora Americana de Inversiones has delivered 69% dividend growth per year on average over the past two years.

The Bottom Line

From a dividend perspective, should investors buy or avoid Administradora Americana de Inversiones? Administradora Americana de Inversiones's earnings per share are down sharply over the last year, although we note that it is paying out a low fraction of its earnings. From a dividend perspective we struggle to see value in a company with declining earnings per share, but it's also true that a one-year decline often doesn't mean much. So we wouldn't be too quick to write this one off. At best we would put it on a watch-list to see if business conditions improve, as it doesn't look like a clear opportunity right now.

If you want to look further into Administradora Americana de Inversiones, it's worth knowing the risks this business faces. Every company has risks, and we've spotted 1 warning sign for Administradora Americana de Inversiones you should know about.

If you're in the market for strong dividend payers, we recommend checking our selection of top 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.