Grupo Aeroportuario del Pacífico, S.A.B. de C.V. (BMV:GAPB) Will Pay A Mex$6.93 Dividend In Four Days

Grupo Aeroportuario del Pacífico, S.A.B. de C.V. (BMV:GAPB) is about to trade ex-dividend in the next four 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. This means that investors who purchase Grupo Aeroportuario del Pacífico. de's shares on or after the 25th of November will not receive the dividend, which will be paid on the 26th of November.

The company's next dividend payment will be Mex$6.93 per share, on the back of last year when the company paid a total of Mex$14.84 to shareholders. Based on the last year's worth of payments, Grupo Aeroportuario del Pacífico. de stock has a trailing yield of around 4.0% on the current share price of Mex$375.23. Dividends are a major contributor to investment returns for long term holders, but only if the dividend continues to be paid. So we need to check whether the dividend payments are covered, and if earnings are growing.

View our latest analysis for Grupo Aeroportuario del Pacífico. de

If a company pays out more in dividends than it earned, then the dividend might become unsustainable - hardly an ideal situation. Its dividend payout ratio is 83% of profit, which means the company is paying out a majority of its earnings. The relatively limited profit reinvestment could slow the rate of future earnings growth. We'd be worried about the risk of a drop in earnings. A useful secondary check can be to evaluate whether Grupo Aeroportuario del Pacífico. de generated enough free cash flow to afford its dividend. Thankfully its dividend payments took up just 49% of the free cash flow it generated, which is a comfortable payout ratio.

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 business enters a downturn and the dividend is cut, the company could see its value fall precipitously. Fortunately for readers, Grupo Aeroportuario del Pacífico. de's earnings per share have been growing at 13% a year for the past five years. It paid out more than three-quarters of its earnings in the last year, even though earnings per share are growing rapidly. We're surprised that management has not elected to reinvest more in the business to accelerate growth further.

Another key way to measure a company's dividend prospects is by measuring its historical rate of dividend growth. In the last 10 years, Grupo Aeroportuario del Pacífico. de has lifted its dividend by approximately 17% a year on average. Both per-share earnings and dividends have both been growing rapidly in recent times, which is great to see.

Final Takeaway

Has Grupo Aeroportuario del Pacífico. de got what it takes to maintain its dividend payments? We like Grupo Aeroportuario del Pacífico. de's growing earnings per share and the fact that - while its payout ratio is around average - it paid out a lower percentage of its cash flow. Grupo Aeroportuario del Pacífico. de looks solid on this analysis overall, and we'd definitely consider investigating it more closely.

So while Grupo Aeroportuario del Pacífico. de looks good from a dividend perspective, it's always worthwhile being up to date with the risks involved in this stock. Every company has risks, and we've spotted 2 warning signs for Grupo Aeroportuario del Pacífico. de you should know about.

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.