Promotora y Operadora de Infraestructura, S. A. B. de C. V. (BMV:PINFRA) Looks Like A Good Stock, And It's Going Ex-Dividend Soon

It looks like Promotora y Operadora de Infraestructura, S. A. B. de C. V. (BMV:PINFRA) is about to go ex-dividend in the next 3 days. The ex-dividend date is commonly two business days before the record date, which is the cut-off date for shareholders to be present on the company's books to be eligible for a dividend payment. The ex-dividend date is important as the process of settlement involves at least two full business days. So if you miss that date, you would not show up on the company's books on the record date. Therefore, if you purchase Promotora y Operadora de Infraestructura S. A. B. de C. V's shares on or after the 3rd of December, you won't be eligible to receive the dividend, when it is paid on the 4th of December.

The company's upcoming dividend is Mex$0.13338 a share, following on from the last 12 months, when the company distributed a total of Mex$4.00 per share to shareholders. Last year's total dividend payments show that Promotora y Operadora de Infraestructura S. A. B. de C. V has a trailing yield of 1.6% on the current share price of Mex$251.37. Dividends are an important source of income to many shareholders, but the health of the business is crucial to maintaining those dividends. As a result, readers should always check whether Promotora y Operadora de Infraestructura S. A. B. de C. V has been able to grow its dividends, or if the dividend might be cut.

This technology could replace computers: discover the 20 stocks are working to make quantum computing a reality.

If a company pays out more in dividends than it earned, then the dividend might become unsustainable - hardly an ideal situation. Promotora y Operadora de Infraestructura S. A. B. de C. V paid out just 7.4% of its profit last year, which we think is conservatively low and leaves plenty of margin for unexpected circumstances. 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. Luckily it paid out just 19% of its free cash flow last year.

It's positive to see that Promotora y Operadora de Infraestructura S. A. B. de C. V'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.

See our latest analysis for Promotora y Operadora de Infraestructura S. A. B. de C. V

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. If earnings fall far enough, the company could be forced to cut its dividend. That's why it's comforting to see Promotora y Operadora de Infraestructura S. A. B. de C. V's earnings have been skyrocketing, up 29% per annum for the past five years. Promotora y Operadora de Infraestructura S. A. B. de C. V earnings per share have been sprinting ahead like the Road Runner at a track and field day; scarcely stopping even for a cheeky "beep-beep". We also like that it is reinvesting most of its profits in its business.'

The main way most investors will assess a company's dividend prospects is by checking the historical rate of dividend growth. Since the start of our data, 10 years ago, Promotora y Operadora de Infraestructura S. A. B. de C. V has lifted its dividend by approximately 16% a year on average. It's great to see earnings per share growing rapidly over several years, and dividends per share growing right along with it.

The Bottom Line

From a dividend perspective, should investors buy or avoid Promotora y Operadora de Infraestructura S. A. B. de C. V? Promotora y Operadora de Infraestructura S. A. B. de C. V has grown its earnings per share while simultaneously reinvesting in the business. Unfortunately it's cut the dividend at least once in the past 10 years, but the conservative payout ratio makes the current dividend look sustainable. Overall we think this is an attractive combination and worthy of further research.

In light of that, while Promotora y Operadora de Infraestructura S. A. B. de C. V has an appealing dividend, it's worth knowing the risks involved with this stock. For example, we've found 1 warning sign for Promotora y Operadora de Infraestructura S. A. B. de C. V that we recommend you consider before investing in the business.

Generally, we wouldn't recommend just buying the first dividend stock you see. Here's a curated list of interesting stocks that are strong dividend payers.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.