Income Investors Should Know That C.E.Management Integrated Laboratory Co.Ltd (TSE:6171) Goes Ex-Dividend Soon

It looks like C.E.Management Integrated Laboratory Co.Ltd (TSE:6171) is about to go ex-dividend in the next 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. The ex-dividend date is important as the process of settlement involves two full business days. So if you miss that date, you would not show up on the company's books on the record date. Thus, you can purchase C.E.Management Integrated LaboratoryLtd's shares before the 27th of December in order to receive the dividend, which the company will pay on the 25th of March.

The company's next dividend payment will be JP¥6.00 per share, and in the last 12 months, the company paid a total of JP¥12.00 per share. Last year's total dividend payments show that C.E.Management Integrated LaboratoryLtd has a trailing yield of 3.9% on the current share price of JP¥306.00. 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! As a result, readers should always check whether C.E.Management Integrated LaboratoryLtd has been able to grow its dividends, or if the dividend might be cut.

See our latest analysis for C.E.Management Integrated LaboratoryLtd

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. C.E.Management Integrated LaboratoryLtd paid out 72% of its earnings to investors last year, a normal payout level for most businesses. That said, even highly profitable companies sometimes might not generate enough cash to pay the dividend, which is why we should always check if the dividend is covered by cash flow. Luckily it paid out just 24% of its free cash flow last year.

It's encouraging to see that the dividend is covered by both profit and cash flow. This generally suggests the dividend is sustainable, as long as earnings don't drop precipitously.

Click here to see how much of its profit C.E.Management Integrated LaboratoryLtd 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 fall far enough, the company could be forced to cut its dividend. Readers will understand then, why we're concerned to see C.E.Management Integrated LaboratoryLtd's earnings per share have dropped 6.4% a year over the past five years. Such a sharp decline casts doubt on the future sustainability of the dividend.

The main way most investors will assess a company's dividend prospects is by checking the historical rate of dividend growth. C.E.Management Integrated LaboratoryLtd has delivered 12% dividend growth per year on average over the past nine years. That's interesting, but the combination of a growing dividend despite declining earnings can typically only be achieved by paying out more of the company's profits. This can be valuable for shareholders, but it can't go on forever.

The Bottom Line

Should investors buy C.E.Management Integrated LaboratoryLtd for the upcoming dividend? We're not enthused by the declining earnings per share, although at least the company's payout ratio is within a reasonable range, meaning it may not be at imminent risk of a dividend cut. In summary, while it has some positive characteristics, we're not inclined to race out and buy C.E.Management Integrated LaboratoryLtd today.

If you're not too concerned about C.E.Management Integrated LaboratoryLtd's ability to pay dividends, you should still be mindful of some of the other risks that this business faces. For example, C.E.Management Integrated LaboratoryLtd has 3 warning signs (and 1 which doesn't sit too well with us) we think you should know about.

A common investing mistake is buying the first interesting stock you see. Here you can find a full list of high-yield 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.