Motor Oil (Hellas) Corinth Refineries S.A. (ATH:MOH) Looks Like A Good Stock, And It's Going Ex-Dividend Soon

Motor Oil (Hellas) Corinth Refineries S.A. (ATH:MOH) stock is about to trade ex-dividend in 3 days. The ex-dividend date is one business day before the record date, which is the cut-off date for shareholders to be present on the company's books to be eligible for a dividend payment. 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 Motor Oil (Hellas) Corinth Refineries' shares before the 18th of December in order to receive the dividend, which the company will pay on the 22nd of December.

The company's next dividend payment will be €0.40 per share. Last year, in total, the company distributed €1.62 to shareholders. Based on the last year's worth of payments, Motor Oil (Hellas) Corinth Refineries stock has a trailing yield of around 6.5% on the current share price of €25.16. 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.

Check out our latest analysis for Motor Oil (Hellas) Corinth Refineries

Dividends are usually paid out of company profits, so if a company pays out more than it earned then its dividend is usually at greater risk of being cut. Motor Oil (Hellas) Corinth Refineries paid out a comfortable 26% of its profit last year. A useful secondary check can be to evaluate whether Motor Oil (Hellas) Corinth Refineries generated enough free cash flow to afford its dividend. It paid out 13% of its free cash flow as dividends last year, which is conservatively low.

It's positive to see that Motor Oil (Hellas) Corinth Refineries'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?

Stocks in companies that generate sustainable earnings growth often make the best dividend prospects, as it is easier to lift the dividend when earnings are rising. If earnings fall far enough, the company could be forced to cut its dividend. For this reason, we're glad to see Motor Oil (Hellas) Corinth Refineries's earnings per share have risen 17% per annum over the last five years. Earnings per share are growing rapidly and the company is keeping more than half of its earnings within the business; an attractive combination which could suggest the company is focused on reinvesting to grow earnings further. This will make it easier to fund future growth efforts and we think this is an attractive combination - plus the dividend can always be increased later.

Many investors will assess a company's dividend performance by evaluating how much the dividend payments have changed over time. Motor Oil (Hellas) Corinth Refineries has delivered 18% dividend growth per year on average over the past 10 years. It's great to see earnings per share growing rapidly over several years, and dividends per share growing right along with it.

To Sum It Up

Is Motor Oil (Hellas) Corinth Refineries worth buying for its dividend? Motor Oil (Hellas) Corinth Refineries has grown its earnings per share while simultaneously reinvesting in the business. Unfortunately it's cut the dividend at least once in the past 10 years, but the conservative payout ratio makes the current dividend look sustainable. Motor Oil (Hellas) Corinth Refineries looks solid on this analysis overall, and we'd definitely consider investigating it more closely.

So while Motor Oil (Hellas) Corinth Refineries looks good from a dividend perspective, it's always worthwhile being up to date with the risks involved in this stock. To help with this, we've discovered 2 warning signs for Motor Oil (Hellas) Corinth Refineries (1 is potentially serious!) that you ought to be aware of before buying the shares.

Generally, we wouldn't recommend just buying the first dividend stock you see. Here's a curated list of interesting stocks that are strong dividend payers.

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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.