Some investors rely on dividends for growing their wealth, and if you're one of those dividend sleuths, you might be intrigued to know that Caisse Régionale de Crédit Agricole du Morbihan (EPA:CMO) is about to go ex-dividend in just 3 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. 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. Thus, you can purchase Caisse Régionale de Crédit Agricole du Morbihan's shares before the 28th of May in order to receive the dividend, which the company will pay on the 1st of June.
The company's next dividend payment will be €2.70 per share, on the back of last year when the company paid a total of €2.70 to shareholders. Last year's total dividend payments show that Caisse Régionale de Crédit Agricole du Morbihan has a trailing yield of 3.6% on the current share price of €75.9. 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 investigate whether Caisse Régionale de Crédit Agricole du Morbihan can afford its dividend, and if the dividend could grow.
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. Fortunately Caisse Régionale de Crédit Agricole du Morbihan's payout ratio is modest, at just 26% of profit.
Generally speaking, the lower a company's payout ratios, the more resilient its dividend usually is.
Have Earnings And Dividends Been Growing?
Stocks with flat earnings can still be attractive dividend payers, but it is important to be more conservative with your approach and demand a greater margin for safety when it comes to dividend sustainability. Investors love dividends, so if earnings fall and the dividend is reduced, expect a stock to be sold off heavily at the same time. That explains why we're not overly excited about Caisse Régionale de Crédit Agricole du Morbihan's flat earnings over the past five years. Better than seeing them fall off a cliff, for sure, but the best dividend stocks grow their earnings meaningfully over the long run.
We'd also point out that Caisse Régionale de Crédit Agricole du Morbihan issued a meaningful number of new shares in the past year. Trying to grow the dividend while issuing large amounts of new shares reminds us of the ancient Greek tale of Sisyphus - perpetually pushing a boulder uphill.
The main way most investors will assess a company's dividend prospects is by checking the historical rate of dividend growth. Caisse Régionale de Crédit Agricole du Morbihan has seen its dividend decline 1.2% per annum on average over the past 10 years, which is not great to see.
Has Caisse Régionale de Crédit Agricole du Morbihan got what it takes to maintain its dividend payments? Caisse Régionale de Crédit Agricole du Morbihan's earnings per share have not grown at all in recent years, although we like that it is paying out a low percentage of its earnings. In sum this is a middling combination, and we find it hard to get excited about the company from a dividend perspective.
If you're not too concerned about Caisse Régionale de Crédit Agricole du Morbihan's ability to pay dividends, you should still be mindful of some of the other risks that this business faces. Every company has risks, and we've spotted 1 warning sign for Caisse Régionale de Crédit Agricole du Morbihan you should know about.
If you're in the market for dividend stocks, we recommend checking our list of top dividend stocks with a greater than 2% yield and an upcoming dividend.
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