Here's What We Like About Viñedos Emiliana's (SNSE:EMILIANA) Upcoming Dividend

Simply Wall St
May 11, 2022
Source: Shutterstock

Readers hoping to buy Viñedos Emiliana S.A. (SNSE:EMILIANA) for its dividend will need to make their move shortly, as the stock is about to trade ex-dividend. The ex-dividend date occurs one day 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. 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. In other words, investors can purchase Viñedos Emiliana's shares before the 16th of May in order to be eligible for the dividend, which will be paid on the 20th of May.

The company's upcoming dividend is CL$0.71 a share, following on from the last 12 months, when the company distributed a total of CL$2.00 per share to shareholders. Looking at the last 12 months of distributions, Viñedos Emiliana has a trailing yield of approximately 5.7% on its current stock price of CLP30. Dividends are a major contributor to investment returns for long term holders, but only if the dividend continues to be paid. As a result, readers should always check whether Viñedos Emiliana has been able to grow its dividends, or if the dividend might be cut.

See our latest analysis for Viñedos Emiliana

If a company pays out more in dividends than it earned, then the dividend might become unsustainable - hardly an ideal situation. Viñedos Emiliana paid out a comfortable 40% of its profit last year.

Click here to see how much of its profit Viñedos Emiliana paid out over the last 12 months.

SNSE:EMILIANA Historic Dividend May 11th 2022

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. Fortunately for readers, Viñedos Emiliana's earnings per share have been growing at 19% a year for the past five years. The company has managed to grow earnings at a rapid rate, while reinvesting most of the profits within the business. This will make it easier to fund future growth efforts and we think this is an attractive combination - plus the dividend can always be increased later.

The main way most investors will assess a company's dividend prospects is by checking the historical rate of dividend growth. In the past 10 years, Viñedos Emiliana has increased its dividend at approximately 5.5% a year on average. Earnings per share have been growing much quicker than dividends, potentially because Viñedos Emiliana is keeping back more of its profits to grow the business.

Final Takeaway

From a dividend perspective, should investors buy or avoid Viñedos Emiliana? Typically, companies that are growing rapidly and paying out a low fraction of earnings are keeping the profits for reinvestment in the business. Perhaps even more importantly - this can sometimes signal management is focused on the long term future of the business. Overall, Viñedos Emiliana looks like a promising dividend stock in this analysis, and we think it would be worth investigating further.

With that in mind, a critical part of thorough stock research is being aware of any risks that stock currently faces. We've identified 3 warning signs with Viñedos Emiliana (at least 1 which is concerning), and understanding these should be part of your investment process.

A common investing mistake is buying the first interesting stock you see. Here you can find a full list of high-yield dividend stocks.

Discounted cash flow calculation for every stock

Simply Wall St does a detailed discounted cash flow calculation every 6 hours for every stock on the market, so if you want to find the intrinsic value of any company just search here. It’s FREE.

Make Confident Investment Decisions

Simply Wall St's Editorial Team provides unbiased, factual reporting on global stocks using in-depth fundamental analysis.
Find out more about our editorial guidelines and team.