Cnl Capital E.K.E.S. - AIFM (ATH:CNLCAP) Passed Our Checks, And It's About To Pay A €0.25 Dividend

It looks like Cnl Capital E.K.E.S. - AIFM (ATH:CNLCAP) is about to go ex-dividend in the next three days. Typically, the ex-dividend date is one business day before the record date which is the date on which a company determines the shareholders eligible 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 Cnl Capital E.K.E.S. - AIFM's shares before the 30th of November in order to receive the dividend, which the company will pay on the 6th of December.

The company's upcoming dividend is €0.25 a share, following on from the last 12 months, when the company distributed a total of €0.30 per share to shareholders. Based on the last year's worth of payments, Cnl Capital E.K.E.S. - AIFM has a trailing yield of 7.0% on the current stock price of €7.1. Dividends are a major contributor to investment returns for long term holders, but only if the dividend continues to be paid. So we need to check whether the dividend payments are covered, and if earnings are growing.

See our latest analysis for Cnl Capital E.K.E.S. - AIFM

If a company pays out more in dividends than it earned, then the dividend might become unsustainable - hardly an ideal situation. It paid out 77% of its earnings as dividends last year, which is not unreasonable, but limits reinvestment in the business and leaves the dividend vulnerable to a business downturn. It could become a concern if earnings started to decline.

When a company paid out less in dividends than it earned in profit, this generally suggests its dividend is affordable. The lower the % of its profit that it pays out, the greater the margin of safety for the dividend if the business enters a downturn.

Click here to see how much of its profit Cnl Capital E.K.E.S. - AIFM 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 earnings decline and the company is forced to cut its dividend, investors could watch the value of their investment go up in smoke. That's why we're optimistic about Cnl Capital E.K.E.S. - AIFM's earnings, which have ripped higher, up 24% over the past year. While we'd be remiss not to point out that a year is a very short time in dividend investing, it's an encouraging sign so far.

We do note though, one year is too short a time to be drawing strong conclusions about a company's future growth prospects.

Many investors will assess a company's dividend performance by evaluating how much the dividend payments have changed over time. In the past five years, Cnl Capital E.K.E.S. - AIFM has increased its dividend at approximately 31% a year on average. Both per-share earnings and dividends have both been growing rapidly in recent times, which is great to see.

The Bottom Line

Should investors buy Cnl Capital E.K.E.S. - AIFM for the upcoming dividend? Earnings per share are growing nicely, and Cnl Capital E.K.E.S. - AIFM is paying out a percentage of its earnings that is around the average for dividend-paying stocks. We think this is a pretty attractive combination, and would be interested in investigating Cnl Capital E.K.E.S. - AIFM more closely.

With that in mind, a critical part of thorough stock research is being aware of any risks that stock currently faces. Every company has risks, and we've spotted 5 warning signs for Cnl Capital E.K.E.S. - AIFM (of which 4 make us uncomfortable!) you should know about.

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.