El Puerto de Liverpool, S.A.B. de C.V. (BMV:LIVEPOLC-1) Looks Like A Good Stock, And It's Going Ex-Dividend Soon

El Puerto de Liverpool, S.A.B. de C.V. (BMV:LIVEPOLC-1) stock is about to trade ex-dividend in four 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 important because any transaction on a stock needs to have been settled before the record date in order to be eligible for a dividend. In other words, investors can purchase El Puerto de Liverpool. de's shares before the 22nd of May in order to be eligible for the dividend, which will be paid on the 23rd of May.

The company's upcoming dividend is Mex$1.77 a share, following on from the last 12 months, when the company distributed a total of Mex$2.95 per share to shareholders. Last year's total dividend payments show that El Puerto de Liverpool. de has a trailing yield of 3.1% on the current share price of Mex$96.71. 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! We need to see whether the dividend is covered by earnings and if it's growing.

We've discovered 1 warning sign about El Puerto de Liverpool. de. View them for free.

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. El Puerto de Liverpool. de is paying out just 18% of its profit after tax, which is comfortably low and leaves plenty of breathing room in the case of adverse events. A useful secondary check can be to evaluate whether El Puerto de Liverpool. de generated enough free cash flow to afford its dividend. It paid out more than half (56%) of its free cash flow in the past year, which is within an average range for most companies.

It's positive to see that El Puerto de Liverpool. de's dividend is covered by both profits and cash flow, since this is generally a sign that the dividend is sustainable, and a lower payout ratio usually suggests a greater margin of safety before the dividend gets cut.

Check out our latest analysis for El Puerto de Liverpool. de

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

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 earnings fall far enough, the company could be forced to cut its dividend. For this reason, we're glad to see El Puerto de Liverpool. de's earnings per share have risen 13% per annum over the last five years. El Puerto de Liverpool. de is paying out a bit over half its earnings, which suggests the company is striking a balance between reinvesting in growth, and paying dividends. Given the quick rate of earnings per share growth and current level of payout, there may be a chance of further dividend increases in the future.

Many investors will assess a company's dividend performance by evaluating how much the dividend payments have changed over time. El Puerto de Liverpool. de has delivered 9.4% dividend growth per year on average over the past 10 years. It's encouraging to see the company lifting dividends while earnings are growing, suggesting at least some corporate interest in rewarding shareholders.

To Sum It Up

Has El Puerto de Liverpool. de got what it takes to maintain its dividend payments? Earnings per share have grown at a nice rate in recent times and over the last year, El Puerto de Liverpool. de paid out less than half its earnings and a bit over half its free cash flow. Overall we think this is an attractive combination and worthy of further research.

On that note, you'll want to research what risks El Puerto de Liverpool. de is facing. Case in point: We've spotted 1 warning sign for El Puerto de Liverpool. de you should be aware of.

If you're in the market for strong dividend payers, we recommend checking our selection of top 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.