Only Two Days Left To Cash In On Orbia Advance Corporation. de's (BMV:ORBIA) Dividend

It looks like Orbia Advance Corporation, S.A.B. de C.V. (BMV:ORBIA) is about to go ex-dividend in the next two 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 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. Thus, you can purchase Orbia Advance Corporation. de's shares before the 27th of June in order to receive the dividend, which the company will pay on the 28th of June.

The company's upcoming dividend is US$0.0209082 a share, following on from the last 12 months, when the company distributed a total of US$0.094 per share to shareholders. Based on the last year's worth of payments, Orbia Advance Corporation. de has a trailing yield of 6.2% on the current stock price of Mex$27.66. Dividends are an important source of income to many shareholders, but the health of the business is crucial to maintaining those dividends. So we need to investigate whether Orbia Advance Corporation. de can afford its dividend, and if the dividend could grow.

See our latest analysis for Orbia Advance Corporation. de

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. Orbia Advance Corporation. de's dividend is not well covered by earnings, as the company lost money last year. This is not a sustainable state of affairs, so it would be worth investigating if earnings are expected to recover. Considering the lack of profitability, we also need to check if the company generated enough cash flow to cover the dividend payment. If Orbia Advance Corporation. de didn't generate enough cash to pay the dividend, then it must have either paid from cash in the bank or by borrowing money, neither of which is sustainable in the long term. Thankfully its dividend payments took up just 41% of the free cash flow it generated, which is a comfortable payout ratio.

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

Have Earnings And Dividends Been Growing?

Companies with consistently growing earnings per share generally make the best dividend stocks, as they usually find it easier to grow dividends per share. Investors love dividends, so if earnings fall and the dividend is reduced, expect a stock to be sold off heavily at the same time. Orbia Advance Corporation. de reported a loss last year, but at least the general trend suggests its income has been improving over the past five years. Even so, an unprofitable company whose business does not quickly recover is usually not a good candidate for dividend investors.

Many investors will assess a company's dividend performance by evaluating how much the dividend payments have changed over time. Since the start of our data, 10 years ago, Orbia Advance Corporation. de has lifted its dividend by approximately 9.2% a year on average. We're glad to see dividends rising alongside earnings over a number of years, which may be a sign the company intends to share the growth with shareholders.

Remember, you can always get a snapshot of Orbia Advance Corporation. de's financial health, by checking our visualisation of its financial health, here.

The Bottom Line

Is Orbia Advance Corporation. de an attractive dividend stock, or better left on the shelf? It's hard to get used to Orbia Advance Corporation. de paying a dividend despite reporting a loss over the past year. At least the dividend was covered by free cash flow, however. In summary, while it has some positive characteristics, we're not inclined to race out and buy Orbia Advance Corporation. de today.

With that being said, if dividends aren't your biggest concern with Orbia Advance Corporation. de, you should know about the other risks facing this business. Be aware that Orbia Advance Corporation. de is showing 3 warning signs in our investment analysis, and 1 of those is a bit concerning...

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.

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