Commcenter, S.A. (BME:CMM) Stock Goes Ex-Dividend In Just Two Days

Regular readers will know that we love our dividends at Simply Wall St, which is why it's exciting to see Commcenter, S.A. (BME:CMM) is about to trade ex-dividend in the next 2 days. Typically, the ex-dividend date is two business days before the record date, which is the date on which a company determines the shareholders eligible to receive a 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. Therefore, if you purchase Commcenter's shares on or after the 24th of June, you won't be eligible to receive the dividend, when it is paid on the 26th of June.

The company's next dividend payment will be €0.0834709 per share. Last year, in total, the company distributed €0.11 to shareholders. Last year's total dividend payments show that Commcenter has a trailing yield of 5.5% on the current share price of €2.02. If you buy this business for its dividend, you should have an idea of whether Commcenter's dividend is reliable and sustainable. So we need to investigate whether Commcenter can afford its dividend, and if the dividend could grow.

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Dividends are typically paid out of company income, so if a company pays out more than it earned, its dividend is usually at a higher risk of being cut. Last year, Commcenter paid out 201% of its profit to shareholders in the form of dividends. This is not sustainable behaviour and requires a closer look on behalf of the purchaser.

Check out our latest analysis for Commcenter

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

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 business enters a downturn and the dividend is cut, the company could see its value fall precipitously. That's why it's comforting to see Commcenter's earnings have been skyrocketing, up 24% per annum for the past five years.

Another key way to measure a company's dividend prospects is by measuring its historical rate of dividend growth. In the past three years, Commcenter has increased its dividend at approximately 5.9% a year on average. It's good to see both earnings and the dividend have improved - although the former has been rising much quicker than the latter, possibly due to the company reinvesting more of its profits in growth.

The Bottom Line

Is Commcenter worth buying for its dividend? Earnings per share have been rising nicely although, even though its cashflow payout ratio is low, we question why Commcenter is paying out so much of its profit. Overall we're not hugely bearish on the stock, but there are likely better dividend investments out there.

If you're not too concerned about Commcenter's ability to pay dividends, you should still be mindful of some of the other risks that this business faces. For example, we've found 5 warning signs for Commcenter (1 makes us a bit uncomfortable!) that deserve your attention before investing in the shares.

If you're in the market for strong dividend payers, we recommend checking our selection of top 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.