Inversiones Siemel S.A. (SNSE:SIEMEL) Pays A CL$6.268 Dividend In Just Four Days

It looks like Inversiones Siemel S.A. (SNSE:SIEMEL) is about to go ex-dividend in the next 4 days. 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. Therefore, if you purchase Inversiones Siemel's shares on or after the 6th of May, you won't be eligible to receive the dividend, when it is paid on the 10th of May.

The company's next dividend payment will be CL$6.268 per share. Last year, in total, the company distributed CL$6.27 to shareholders. Last year's total dividend payments show that Inversiones Siemel has a trailing yield of 2.0% on the current share price of CL$310.01. Dividends are an important source of income to many shareholders, but the health of the business is crucial to maintaining those dividends. So we need to investigate whether Inversiones Siemel can afford its dividend, and if the dividend could grow.

View our latest analysis for Inversiones Siemel

If a company pays out more in dividends than it earned, then the dividend might become unsustainable - hardly an ideal situation. Inversiones Siemel has a low and conservative payout ratio of just 17% of its income after tax.

Click here to see how much of its profit Inversiones Siemel 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. Investors love dividends, so if earnings fall and the dividend is reduced, expect a stock to be sold off heavily at the same time. With that in mind, we're discomforted by Inversiones Siemel's 20% per annum decline in earnings in the past five years. Such a sharp decline casts doubt on the future sustainability of the dividend.

The main way most investors will assess a company's dividend prospects is by checking the historical rate of dividend growth. Inversiones Siemel has seen its dividend decline 18% per annum on average over the past 10 years, which is not great to see. While it's not great that earnings and dividends per share have fallen in recent years, we're encouraged by the fact that management has trimmed the dividend rather than risk over-committing the company in a risky attempt to maintain yields to shareholders.

To Sum It Up

Has Inversiones Siemel got what it takes to maintain its dividend payments? Earnings per share have shrunk noticeably in recent years, although we like that the company has a low payout ratio. This could suggest a cut to the dividend may not be a major risk in the near future. We think this is a pretty attractive combination, and would be interested in investigating Inversiones Siemel more closely.

So while Inversiones Siemel looks good from a dividend perspective, it's always worthwhile being up to date with the risks involved in this stock. For example, we've found 2 warning signs for Inversiones Siemel (1 is a bit concerning!) that deserve your attention before investing in the shares.

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.