Income Investors Should Know That Administradora de Fondos de Pensiones Cuprum S.A. (SNSE:CUPRUM) Goes Ex-Dividend Soon

Some investors rely on dividends for growing their wealth, and if you're one of those dividend sleuths, you might be intrigued to know that Administradora de Fondos de Pensiones Cuprum S.A. (SNSE:CUPRUM) is about to go ex-dividend in just three days. The ex-dividend date is commonly two business days 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 at least 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 de Fondos de Pensiones Cuprum investors that purchase the stock on or after the 12th of May will not receive the dividend, which will be paid on the 15th of May.

The company's next dividend payment will be CL$2.34921 per share. Last year, in total, the company distributed CL$5.87 to shareholders. Based on the last year's worth of payments, Administradora de Fondos de Pensiones Cuprum has a trailing yield of 7.8% on the current stock price of CL$75.27. 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! So we need to check whether the dividend payments are covered, and if earnings are growing.

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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. It paid out 78% of its earnings as dividends last year, which is not unreasonable, but limits reinvestment in the business and leaves the dividend vulnerable to a business downturn. It could become a concern if earnings started to decline.

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

Check out our latest analysis for Administradora de Fondos de Pensiones Cuprum

Click here to see how much of its profit Administradora de Fondos de Pensiones Cuprum 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 business enters a downturn and the dividend is cut, the company could see its value fall precipitously. With that in mind, we're encouraged by the steady growth at Administradora de Fondos de Pensiones Cuprum, with earnings per share up 2.4% on average over the last five years.

Another key way to measure a company's dividend prospects is by measuring its historical rate of dividend growth. In the past 10 years, Administradora de Fondos de Pensiones Cuprum has increased its dividend at approximately 18% a year on average. It's encouraging to see the company lifting dividends while earnings are growing, suggesting at least some corporate interest in rewarding shareholders.

Final Takeaway

Should investors buy Administradora de Fondos de Pensiones Cuprum for the upcoming dividend? Administradora de Fondos de Pensiones Cuprum has been generating some growth in earnings per share while paying out more than half of its earnings to shareholders in the form of dividends. In sum this is a middling combination, and we find it hard to get excited about the company from a dividend perspective.

If you want to look further into Administradora de Fondos de Pensiones Cuprum, it's worth knowing the risks this business faces. For example, we've found 2 warning signs for Administradora de Fondos de Pensiones Cuprum that we recommend you consider before investing in the business.

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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.