Grupo Profuturo, S.A.B. de C.V. (BMV:GPROFUT) Looks Interesting, And It's About To Pay A Dividend

Some investors rely on dividends for growing their wealth, and if you're one of those dividend sleuths, you might be intrigued to know that Grupo Profuturo, S.A.B. de C.V. (BMV:GPROFUT) is about to go ex-dividend in just 3 days. The ex-dividend date generally occurs two days 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 of consequence because whenever a stock is bought or sold, the trade can take two business days or more to settle. Meaning, you will need to purchase Grupo Profuturo. de's shares before the 14th of May to receive the dividend, which will be paid on the 15th of May.

The company's upcoming dividend is Mex$7.35 a share, following on from the last 12 months, when the company distributed a total of Mex$7.05 per share to shareholders. Calculating the last year's worth of payments shows that Grupo Profuturo. de has a trailing yield of 5.9% on the current share price of Mex$120.00. Dividends are a major contributor to investment returns for long term holders, but only if the dividend continues to be paid. That's why we should always check whether the dividend payments appear sustainable, and if the company is growing.

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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. Grupo Profuturo. de paid out more than half (58%) of its earnings last year, which is a regular payout ratio for most companies.

Companies that pay out less in dividends than they earn in profits generally have more sustainable dividends. The lower the payout ratio, the more wiggle room the business has before it could be forced to cut the dividend.

Check out our latest analysis for Grupo Profuturo. de

Click here to see how much of its profit Grupo Profuturo. de paid out over the last 12 months.

Have Earnings And Dividends Been Growing?

Businesses with strong growth prospects usually make the best dividend payers, because it's easier to grow dividends when earnings per share are improving. If business enters a downturn and the dividend is cut, the company could see its value fall precipitously. It's encouraging to see Grupo Profuturo. de has grown its earnings rapidly, up 258% a year for the past five years.

Many investors will assess a company's dividend performance by evaluating how much the dividend payments have changed over time. In the past 10 years, Grupo Profuturo. de has increased its dividend at approximately 4.9% a year on average. Earnings per share have been growing much quicker than dividends, potentially because Grupo Profuturo. de is keeping back more of its profits to grow the business.

To Sum It Up

Has Grupo Profuturo. de got what it takes to maintain its dividend payments? Grupo Profuturo. de has an acceptable payout ratio and its earnings per share have been improving at a decent rate. We think this is a pretty attractive combination, and would be interested in investigating Grupo Profuturo. de more closely.

In light of that, while Grupo Profuturo. de has an appealing dividend, it's worth knowing the risks involved with this stock. Be aware that Grupo Profuturo. de is showing 4 warning signs in our investment analysis, and 3 of those make us uncomfortable...

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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.