Grupo Rotoplas S.A.B. de C.V. (BMV:AGUA) Pays A Mex$0.50 Dividend In Just Four Days

Regular readers will know that we love our dividends at Simply Wall St, which is why it's exciting to see Grupo Rotoplas S.A.B. de C.V. (BMV:AGUA) is about to trade ex-dividend in the next 4 days. The ex-dividend date is usually set to be one business day before the record date which is the cut-off date on which you must be present on the company's books as a shareholder in order to receive the dividend. 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. This means that investors who purchase Grupo Rotoplas. de's shares on or after the 6th of May will not receive the dividend, which will be paid on the 8th of May.

The company's next dividend payment will be Mex$0.50 per share, on the back of last year when the company paid a total of Mex$0.84 to shareholders. Last year's total dividend payments show that Grupo Rotoplas. de has a trailing yield of 2.9% on the current share price of Mex$29.03. If you buy this business for its dividend, you should have an idea of whether Grupo Rotoplas. de's dividend is reliable and sustainable. So we need to check whether the dividend payments are covered, and if earnings are growing.

See our latest analysis for Grupo Rotoplas. de

Dividends are typically paid from company earnings. If a company pays more in dividends than it earned in profit, then the dividend could be unsustainable. Grupo Rotoplas. de paid out 71% of its earnings to investors last year, a normal payout level for most businesses.

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 business enters a downturn and the dividend is cut, the company could see its value fall precipitously. This is why it's a relief to see Grupo Rotoplas. de earnings per share are up 6.4% per annum over the last five years. Decent historical earnings per share growth suggests Grupo Rotoplas. de has been effectively growing value for shareholders. However, it's now paying out more than half its earnings as dividends. If management lifts the payout ratio further, we'd take this as a tacit signal that the company's growth prospects are slowing.

Many investors will assess a company's dividend performance by evaluating how much the dividend payments have changed over time. In the past eight years, Grupo Rotoplas. de has increased its dividend at approximately 16% a year on average. It's encouraging to see the company lifting dividends while earnings are growing, suggesting at least some corporate interest in rewarding shareholders.

To Sum It Up

Is Grupo Rotoplas. de an attractive dividend stock, or better left on the shelf? Earnings per share have been growing at a reasonable rate, and the company is paying out a bit over half its earnings as dividends. Overall, Grupo Rotoplas. de looks like a promising dividend stock in this analysis, and we think it would be worth investigating further.

In light of that, while Grupo Rotoplas. de has an appealing dividend, it's worth knowing the risks involved with this stock. In terms of investment risks, we've identified 4 warning signs with Grupo Rotoplas. de and understanding them should be part of your investment process.

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.