Christian Dior SE (EPA:CDI) Pays A €2.00 Dividend In Just Three Days

Christian Dior SE (EPA:CDI) is about to trade ex-dividend in the next three days. You will need to purchase shares before the 1st of December to receive the dividend, which will be paid on the 3rd of December.

Christian Dior's next dividend payment will be €2.00 per share, and in the last 12 months, the company paid a total of €4.60 per share. Last year's total dividend payments show that Christian Dior has a trailing yield of 1.1% on the current share price of €434. Dividends are an important source of income to many shareholders, but the health of the business is crucial to maintaining those dividends. So we need to investigate whether Christian Dior can afford its dividend, and if the dividend could grow.

Check out our latest analysis for Christian Dior

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 Christian Dior paying out a modest 46% of its earnings. Yet cash flows are even more important than profits for assessing a dividend, so we need to see if the company generated enough cash to pay its distribution. Fortunately, it paid out only 40% of its free cash flow in the past year.

It's positive to see that Christian Dior'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 how much of its profit Christian Dior paid out over the last 12 months.

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. So we're not too excited that Christian Dior's earnings are down 5.0% a year over the past 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 past 10 years, Christian Dior has increased its dividend at approximately 11% a year on average.

The Bottom Line

Is Christian Dior worth buying for its dividend? Christian Dior has comfortably low cash and profit payout ratios, which may mean the dividend is sustainable even in the face of a sharp decline in earnings per share. Still, we consider declining earnings to be a warning sign. In summary, it's hard to get excited about Christian Dior from a dividend perspective.

On that note, you'll want to research what risks Christian Dior is facing. Case in point: We've spotted 1 warning sign for Christian Dior you should be aware of.

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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