Be Sure To Check Out Miquel y Costas & Miquel, S.A. (BME:MCM) Before It Goes Ex-Dividend

Miquel y Costas & Miquel, S.A. (BME:MCM) is about to trade ex-dividend in the next 3 days. This means that investors who purchase shares on or after the 10th of December will not receive the dividend, which will be paid on the 14th of December.

Miquel y Costas & Miquel's next dividend payment will be €0.19 per share, on the back of last year when the company paid a total of €0.31 to shareholders. Based on the last year's worth of payments, Miquel y Costas & Miquel stock has a trailing yield of around 2.1% on the current share price of €14.28. 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 Miquel y Costas & Miquel has been able to grow its dividends, or if the dividend might be cut.

Check out our latest analysis for Miquel y Costas & Miquel

If a company pays out more in dividends than it earned, then the dividend might become unsustainable - hardly an ideal situation. Miquel y Costas & Miquel is paying out just 10% of its profit after tax, which is comfortably low and leaves plenty of breathing room in the case of adverse events. Yet cash flow is typically more important than profit for assessing dividend sustainability, so we should always check if the company generated enough cash to afford its dividend. Over the last year it paid out 60% of its free cash flow as dividends, within the usual range for most companies.

It's positive to see that Miquel y Costas & Miquel'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?

Companies with consistently growing earnings per share generally make the best dividend stocks, as they usually find it easier to grow dividends per share. Investors love dividends, so if earnings fall and the dividend is reduced, expect a stock to be sold off heavily at the same time. Fortunately for readers, Miquel y Costas & Miquel's earnings per share have been growing at 14% a year for the past five years. Miquel y Costas & Miquel has an average payout ratio which suggests a balance between growing earnings and rewarding shareholders. This is a reasonable combination that could hint at some further dividend increases in the future.

Another key way to measure a company's dividend prospects is by measuring its historical rate of dividend growth. Miquel y Costas & Miquel has delivered an average of 8.8% per year annual increase in its dividend, based on the past 10 years of dividend payments. 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

Is Miquel y Costas & Miquel an attractive dividend stock, or better left on the shelf? From a dividend perspective, we're encouraged to see that earnings per share have been growing, the company is paying out less than half of its earnings, and a bit over half its free cash flow. Miquel y Costas & Miquel looks solid on this analysis overall, and we'd definitely consider investigating it more closely.

Wondering what the future holds for Miquel y Costas & Miquel? See what the two analysts we track are forecasting, with this visualisation of its historical and future estimated earnings and cash flow

We wouldn't recommend just buying the first dividend stock you see, though. Here's a list of interesting dividend stocks with a greater than 2% yield and an upcoming dividend.

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This article by Simply Wall St is general in nature. 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.
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