Compañía Minera Autlán. de's (BMV:AUTLANB) Dividend Will Be Reduced To $0.001

Compañía Minera Autlán, S.A.B. de C.V.'s (BMV:AUTLANB) dividend is being reduced from last year's payment covering the same period to $0.001 on the 9th of June. This means that the dividend yield is 4.0%, which is a bit low when comparing to other companies in the industry.

View our latest analysis for Compañía Minera Autlán. de

Compañía Minera Autlán. de Might Find It Hard To Continue The Dividend

Even a low dividend yield can be attractive if it is sustained for years on end. However, prior to this announcement, Compañía Minera Autlán. de's dividend was comfortably covered by both cash flow and earnings. This means that most of its earnings are being retained to grow the business.

Looking forward, earnings per share could fall by 21.8% over the next year if the trend of the last few years can't be broken. This means that the company won't turn a profit over the next year, but with healthy cash flows at the moment the dividend could still be okay to continue.

Dividend Volatility

Although the company has a long dividend history, it has been cut at least once in the last 10 years. The annual payment during the last 10 years was $0.0163 in 2013, and the most recent fiscal year payment was $0.032. This means that it has been growing its distributions at 7.0% per annum over that time. We like to see dividends have grown at a reasonable rate, but with at least one substantial cut in the payments, we're not certain this dividend stock would be ideal for someone intending to live on the income.

The Dividend Has Limited Growth Potential

Growing earnings per share could be a mitigating factor when considering the past fluctuations in the dividend. Compañía Minera Autlán. de's earnings per share has shrunk at 22% a year over the past five years. This steep decline can indicate that the business is going through a tough time, which could constrain its ability to pay a larger dividend each year in the future.

Our Thoughts On Compañía Minera Autlán. de's Dividend

Overall, it's not great to see that the dividend has been cut, but this might be explained by the payments being a bit high previously. The payments haven't been particularly stable and we don't see huge growth potential, but with the dividend well covered by cash flows it could prove to be reliable over the short term. We would be a touch cautious of relying on this stock primarily for the dividend income.

Investors generally tend to favour companies with a consistent, stable dividend policy as opposed to those operating an irregular one. Still, investors need to consider a host of other factors, apart from dividend payments, when analysing a company. For example, we've identified 2 warning signs for Compañía Minera Autlán. de (1 makes us a bit uncomfortable!) that you should be aware of before investing. If you are a dividend investor, you might also want to look at our curated list of high yield dividend stocks.

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