Here's What We Like About Corporación Inmobiliaria Vesta. de's (BMV:VESTA) Upcoming Dividend

Regular readers will know that we love our dividends at Simply Wall St, which is why it's exciting to see Corporación Inmobiliaria Vesta S.A.B. de C.V. (BMV:VESTA) is about to trade ex-dividend in the next four days. You can purchase shares before the 13th of January in order to receive the dividend, which the company will pay on the 15th of January.

Corporación Inmobiliaria Vesta. de's next dividend payment will be US$0.024 per share, on the back of last year when the company paid a total of US$0.094 to shareholders. Based on the last year's worth of payments, Corporación Inmobiliaria Vesta. de stock has a trailing yield of around 4.7% on the current share price of MX$40.06. 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 Corporación Inmobiliaria Vesta. de can afford its dividend, and if the dividend could grow.

View our latest analysis for Corporación Inmobiliaria Vesta. de

If a company pays out more in dividends than it earned, then the dividend might become unsustainable - hardly an ideal situation. Corporación Inmobiliaria Vesta. de is paying out an acceptable 65% of its profit, a common payout level among most companies. Yet cash flow is typically more important than profit for assessing dividend sustainability, so we should always check if the company generated enough cash to afford its dividend. Dividends consumed 66% of the company's free cash flow last year, which is within a normal range for most dividend-paying organisations.

It's encouraging to see that the dividend is covered by both profit and cash flow. This generally suggests the dividend is sustainable, as long as earnings don't drop precipitously.

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 earnings decline and the company is forced to cut its dividend, investors could watch the value of their investment go up in smoke. It's encouraging to see Corporación Inmobiliaria Vesta. de has grown its earnings rapidly, up 25% a year for the past five years. Management appears to be striking a nice balance between reinvesting for growth and paying dividends to shareholders. Earnings per share have been growing quickly and in combination with some reinvestment and a middling payout ratio, the stock may have decent dividend prospects going forwards.

Another key way to measure a company's dividend prospects is by measuring its historical rate of dividend growth. Corporación Inmobiliaria Vesta. de has delivered an average of 17% per year annual increase in its dividend, based on the past eight years of dividend payments. It's great to see earnings per share growing rapidly over several years, and dividends per share growing right along with it.

Final Takeaway

Is Corporación Inmobiliaria Vesta. de worth buying for its dividend? Higher earnings per share generally lead to higher dividends from dividend-paying stocks over the long run. That's why we're glad to see Corporación Inmobiliaria Vesta. de's earnings per share growing, although as we saw, the company is paying out more than half of its earnings and cashflow - 65% and 66% respectively. All things considered, we are not particularly enthused about Corporación Inmobiliaria Vesta. de from a dividend perspective.

While it's tempting to invest in Corporación Inmobiliaria Vesta. de for the dividends alone, you should always be mindful of the risks involved. For instance, we've identified 3 warning signs for Corporación Inmobiliaria Vesta. de (1 is concerning) you should be aware of.

A common investment mistake is buying the first interesting stock you see. Here you can find a list of promising dividend stocks with a greater than 2% yield and an upcoming dividend.

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This article by Simply Wall St is general in nature. 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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