The Convenience Shop (Holding) plc (MTSE:CVS) Will Pay A €0.01 Dividend In Three Days

Regular readers will know that we love our dividends at Simply Wall St, which is why it's exciting to see The Convenience Shop (Holding) plc (MTSE:CVS) is about to trade ex-dividend in the next 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. 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. This means that investors who purchase Convenience Shop (Holding)'s shares on or after the 6th of September will not receive the dividend, which will be paid on the 30th of September.

The company's next dividend payment will be €0.01 per share, and in the last 12 months, the company paid a total of €0.03 per share. Last year's total dividend payments show that Convenience Shop (Holding) has a trailing yield of 3.0% on the current share price of €1.01. Dividends are a major contributor to investment returns for long term holders, but only if the dividend continues to be paid. We need to see whether the dividend is covered by earnings and if it's growing.

Check out our latest analysis for Convenience Shop (Holding)

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 Convenience Shop (Holding) paying out a modest 32% of its earnings.

Click here to see how much of its profit Convenience Shop (Holding) paid out over the last 12 months.

Have Earnings And Dividends Been Growing?

Businesses with shrinking earnings are tricky from a dividend perspective. If business enters a downturn and the dividend is cut, the company could see its value fall precipitously. Convenience Shop (Holding)'s earnings per share plummeted 46% over the past year,which is rarely good news for the dividend.

Given that Convenience Shop (Holding) has only been paying a dividend for a year, there's not much of a past history to draw insight from.

The Bottom Line

Should investors buy Convenience Shop (Holding) for the upcoming dividend? Convenience Shop (Holding) 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, while it has some positive characteristics, we're not inclined to race out and buy Convenience Shop (Holding) today.

With that being said, if dividends aren't your biggest concern with Convenience Shop (Holding), you should know about the other risks facing this business. Our analysis shows 4 warning signs for Convenience Shop (Holding) that we strongly recommend you have a look at before investing in the company.

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.