Why You Might Be Interested In Organización Soriana, S. A. B. de C. V. (BMV:SORIANAB) For Its Upcoming Dividend

Organización Soriana, S. A. B. de C. V. (BMV:SORIANAB) 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 an important date to be aware of as any purchase of the stock made on or after this date might mean a late settlement that doesn't show on the record date. Accordingly, Organización Soriana S. A. B. de C. V investors that purchase the stock on or after the 13th of December will not receive the dividend, which will be paid on the 15th of December.

The company's next dividend payment will be Mex$0.56 per share, on the back of last year when the company paid a total of Mex$0.56 to shareholders. Calculating the last year's worth of payments shows that Organización Soriana S. A. B. de C. V has a trailing yield of 1.8% on the current share price of MX$30.58. 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! So we need to investigate whether Organización Soriana S. A. B. de C. V can afford its dividend, and if the dividend could grow.

Check out our latest analysis for Organización Soriana S. A. B. de C. V

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. Organización Soriana S. A. B. de C. V is paying out just 21% of its profit after tax, which is comfortably low and leaves plenty of breathing room in the case of adverse events.

Click here to see the company's payout ratio, plus analyst estimates of its future dividends.

Have Earnings And Dividends Been Growing?

Stocks with flat earnings can still be attractive dividend payers, but it is important to be more conservative with your approach and demand a greater margin for safety when it comes to dividend sustainability. Investors love dividends, so if earnings fall and the dividend is reduced, expect a stock to be sold off heavily at the same time. It's not encouraging to see that Organización Soriana S. A. B. de C. V's earnings are effectively flat over the past five years. Better than seeing them fall off a cliff, for sure, but the best dividend stocks grow their earnings meaningfully over the long run. Organización Soriana S. A. B. de C. V is retaining more than three-quarters of its earnings and has a history of generating some growth in earnings. We think this is a reasonable combination.

The main way most investors will assess a company's dividend prospects is by checking the historical rate of dividend growth. Since the start of our data, 10 years ago, Organización Soriana S. A. B. de C. V has lifted its dividend by approximately 3.6% a year on average.

Final Takeaway

Is Organización Soriana S. A. B. de C. V worth buying for its dividend? Earnings per share have been flat in recent years, although Organización Soriana S. A. B. de C. V reinvests more than half its earnings in the business, which could suggest there are some growth projects that have not yet reached fruition. In summary, Organización Soriana S. A. B. de C. V appears to have some promise as a dividend stock, and we'd suggest taking a closer look at it.

Wondering what the future holds for Organización Soriana S. A. B. de C. V? See what the eight analysts we track are forecasting, with this visualisation of its historical and future estimated earnings and cash flow

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

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.