Why You Might Be Interested In Administradora de Fondos de Pensiones PlanVital S.A. (SNSE:PLANVITAL) For Its Upcoming Dividend

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 PlanVital S.A. (SNSE:PLANVITAL) is about to go ex-dividend in just three 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 of consequence because whenever a stock is bought or sold, the trade takes at least two business day to settle. Accordingly, Administradora de Fondos de Pensiones PlanVital investors that purchase the stock on or after the 27th of May will not receive the dividend, which will be paid on the 31st of May.

The company's upcoming dividend is CL$11.3508 a share, following on from the last 12 months, when the company distributed a total of CL$8.66 per share to shareholders. Based on the last year's worth of payments, Administradora de Fondos de Pensiones PlanVital has a trailing yield of 4.3% on the current stock price of CL$200.62. If you buy this business for its dividend, you should have an idea of whether Administradora de Fondos de Pensiones PlanVital's dividend is reliable and sustainable. As a result, readers should always check whether Administradora de Fondos de Pensiones PlanVital has been able to grow its dividends, or if the dividend might be cut.

See our latest analysis for Administradora de Fondos de Pensiones PlanVital

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. Administradora de Fondos de Pensiones PlanVital paid out a comfortable 30% of its profit last year.

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.

Click here to see how much of its profit Administradora de Fondos de Pensiones PlanVital paid out over the last 12 months.

Have Earnings And Dividends Been Growing?

Businesses with strong growth prospects usually make the best dividend payers, because it's easier to grow dividends when earnings per share are improving. Investors love dividends, so if earnings fall and the dividend is reduced, expect a stock to be sold off heavily at the same time. That's why it's comforting to see Administradora de Fondos de Pensiones PlanVital's earnings have been skyrocketing, up 35% per annum for the past five years.

The main way most investors will assess a company's dividend prospects is by checking the historical rate of dividend growth. Administradora de Fondos de Pensiones PlanVital has delivered an average of 91% per year annual increase in its dividend, based on the past seven years of dividend payments. It's exciting to see that both earnings and dividends per share have grown rapidly over the past few years.

The Bottom Line

From a dividend perspective, should investors buy or avoid Administradora de Fondos de Pensiones PlanVital? Typically, companies that are growing rapidly and paying out a low fraction of earnings are keeping the profits for reinvestment in the business. This is one of the most attractive investment combinations under this analysis, as it can create substantial value for investors over the long run. Overall, Administradora de Fondos de Pensiones PlanVital looks like a promising dividend stock in this analysis, and we think it would be worth investigating further.

On that note, you'll want to research what risks Administradora de Fondos de Pensiones PlanVital is facing. Our analysis shows 1 warning sign for Administradora de Fondos de Pensiones PlanVital and you should be aware of it before buying any shares.

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.