Just Three Days Till Empresas CMPC S.A. (SNSE:CMPC) Will Be Trading Ex-Dividend

Regular readers will know that we love our dividends at Simply Wall St, which is why it's exciting to see Empresas CMPC S.A. (SNSE:CMPC) is about to trade ex-dividend in the next three days. The ex-dividend date is usually set to be one business day before the record date which is the cut-off date on which you must be present on the company's books as a shareholder in order to receive the dividend. The ex-dividend date is important because any transaction on a stock needs to have been settled before the record date in order to be eligible for a dividend. Meaning, you will need to purchase Empresas CMPC's shares before the 23rd of September to receive the dividend, which will be paid on the 26th of September.

The company's next dividend payment will be US$0.0168 per share, on the back of last year when the company paid a total of US$0.073 to shareholders. Based on the last year's worth of payments, Empresas CMPC has a trailing yield of 4.5% on the current stock price of CL$1495.00. If you buy this business for its dividend, you should have an idea of whether Empresas CMPC's dividend is reliable and sustainable. That's why we should always check whether the dividend payments appear sustainable, and if the company is growing.

View our latest analysis for Empresas CMPC

If a company pays out more in dividends than it earned, then the dividend might become unsustainable - hardly an ideal situation. That's why it's good to see Empresas CMPC paying out a modest 40% of its earnings. That said, even highly profitable companies sometimes might not generate enough cash to pay the dividend, which is why we should always check if the dividend is covered by cash flow. Over the last year it paid out 58% of its free cash flow as dividends, within the usual range for most companies.

It's positive to see that Empresas CMPC's dividend is covered by both profits and cash flow, since this is generally a sign that the dividend is sustainable, and a lower payout ratio usually suggests a greater margin of safety before the dividend gets cut.

Click here to see the company's payout ratio, plus analyst estimates of its future dividends.

Have Earnings And Dividends Been Growing?

Businesses with shrinking earnings are tricky from a dividend perspective. If earnings decline and the company is forced to cut its dividend, investors could watch the value of their investment go up in smoke. That's why it's not ideal to see Empresas CMPC's earnings per share have been shrinking at 2.1% a year over the previous five years.

Another key way to measure a company's dividend prospects is by measuring its historical rate of dividend growth. Since the start of our data, 10 years ago, Empresas CMPC has lifted its dividend by approximately 9.9% a year on average.

Final Takeaway

Is Empresas CMPC worth buying for its dividend? Earnings per share have fallen significantly, although at least Empresas CMPC paid out less than half of its profits and free cash flow over the last year, leaving some margin of safety. In summary, while it has some positive characteristics, we're not inclined to race out and buy Empresas CMPC today.

With that being said, if dividends aren't your biggest concern with Empresas CMPC, you should know about the other risks facing this business. For instance, we've identified 5 warning signs for Empresas CMPC (1 doesn't sit too well with us) you should be aware of.

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.