Grupo Catalana Occidente, S.A. (BME:GCO) Looks Like A Good Stock, And It's Going Ex-Dividend Soon

Grupo Catalana Occidente, S.A. (BME:GCO) is about to trade ex-dividend in the next couple of 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. It is important to be aware of the ex-dividend date because any trade on the stock needs to have been settled on or before the record date. Therefore, if you purchase Grupo Catalana Occidente's shares on or after the 7th of October, you won't be eligible to receive the dividend, when it is paid on the 9th of October.

The company's next dividend payment will be €0.16767 per share, and in the last 12 months, the company paid a total of €1.12 per share. Last year's total dividend payments show that Grupo Catalana Occidente has a trailing yield of 2.9% on the current share price of €39.00. 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.

See our latest analysis for Grupo Catalana Occidente

If a company pays out more in dividends than it earned, then the dividend might become unsustainable - hardly an ideal situation. Grupo Catalana Occidente paid out just 15% of its profit last year, which we think is conservatively low and leaves plenty of margin for unexpected circumstances.

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

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

Have Earnings And Dividends Been Growing?

Companies with consistently growing earnings per share generally make the best dividend stocks, as they usually find it easier to grow dividends per share. If earnings fall far enough, the company could be forced to cut its dividend. With that in mind, we're encouraged by the steady growth at Grupo Catalana Occidente, with earnings per share up 9.9% on average over the last five years.

The main way most investors will assess a company's dividend prospects is by checking the historical rate of dividend growth. In the last 10 years, Grupo Catalana Occidente has lifted its dividend by approximately 6.6% a year on average. We're glad to see dividends rising alongside earnings over a number of years, which may be a sign the company intends to share the growth with shareholders.

To Sum It Up

From a dividend perspective, should investors buy or avoid Grupo Catalana Occidente? It has been growing its earnings per share somewhat in recent years, although it reinvests more than half its earnings in the business, which could suggest there are some growth projects that have not yet reached fruition. In summary, Grupo Catalana Occidente appears to have some promise as a dividend stock, and we'd suggest taking a closer look at it.

Curious what other investors think of Grupo Catalana Occidente? See what analysts are forecasting, with this visualisation of its historical and future estimated earnings and cash flow.

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.