Cross Marketing Group Inc. (TSE:3675) Looks Interesting, And It's About To Pay A Dividend

Cross Marketing Group Inc. (TSE:3675) stock is about to trade ex-dividend in three 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. The ex-dividend date is important because any transaction on a stock needs to have been settled before the record date in order to be eligible for a dividend. Accordingly, Cross Marketing Group investors that purchase the stock on or after the 27th of December will not receive the dividend, which will be paid on the 4th of March.

The company's next dividend payment will be JP¥7.00 per share, and in the last 12 months, the company paid a total of JP¥14.00 per share. Based on the last year's worth of payments, Cross Marketing Group has a trailing yield of 1.8% on the current stock price of JP¥785.00. If you buy this business for its dividend, you should have an idea of whether Cross Marketing Group's dividend is reliable and sustainable. As a result, readers should always check whether Cross Marketing Group has been able to grow its dividends, or if the dividend might be cut.

View our latest analysis for Cross Marketing Group

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. Cross Marketing Group is paying out just 17% of its profit after tax, which is comfortably low and leaves plenty of breathing room in the case of adverse events. 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 18% 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 Cross Marketing Group paid out over the last 12 months.

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 decline and the company is forced to cut its dividend, investors could watch the value of their investment go up in smoke. It's encouraging to see Cross Marketing Group has grown its earnings rapidly, up 33% a year for the past five years. Cross Marketing Group looks like a real growth company, with earnings per share growing at a cracking pace and the company reinvesting most of its profits in the business.

Many investors will assess a company's dividend performance by evaluating how much the dividend payments have changed over time. In the last 10 years, Cross Marketing Group has lifted its dividend by approximately 12% a year on average. It's exciting to see that both earnings and dividends per share have grown rapidly over the past few years.

To Sum It Up

Should investors buy Cross Marketing Group for the upcoming dividend? It's great that Cross Marketing Group is growing earnings per share while simultaneously paying out a low percentage of both its earnings and cash flow. It's disappointing to see the dividend has been cut at least once in the past, but as things stand now, the low payout ratio suggests a conservative approach to dividends, which we like. Cross Marketing Group looks solid on this analysis overall, and we'd definitely consider investigating it more closely.

On that note, you'll want to research what risks Cross Marketing Group is facing. For example, we've found 2 warning signs for Cross Marketing Group that we recommend you consider before investing in the business.

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.