Stock Analysis

Read This Before Considering Conduril - Engenharia, S.A. (ELI:CDU) For Its Upcoming €1.00 Dividend

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Readers hoping to buy Conduril - Engenharia, S.A. (ELI:CDU) for its dividend will need to make their move shortly, as the stock is about to trade ex-dividend. 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 because any transaction on a stock needs to have been settled before the record date in order to be eligible for a dividend. This means that investors who purchase Conduril - Engenharia's shares on or after the 18th of May will not receive the dividend, which will be paid on the 20th of May.

The company's next dividend payment will be €1.00 per share. Last year, in total, the company distributed €1.00 to shareholders. Calculating the last year's worth of payments shows that Conduril - Engenharia has a trailing yield of 3.5% on the current share price of €28.2. 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 Conduril - Engenharia has been able to grow its dividends, or if the dividend might be cut.

Check out our latest analysis for Conduril - Engenharia

Dividends are typically paid from company earnings. If a company pays more in dividends than it earned in profit, then the dividend could be unsustainable. Fortunately Conduril - Engenharia's payout ratio is modest, at just 31% of profit. That said, even highly profitable companies sometimes might not generate enough cash to pay the dividend, which is why we should always check if the dividend is covered by cash flow.

Click here to see how much of its profit Conduril - Engenharia paid out over the last 12 months.

ENXTLS:CDU Historic Dividend May 14th 2022

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. Investors love dividends, so if earnings fall and the dividend is reduced, expect a stock to be sold off heavily at the same time. This is why it's a relief to see Conduril - Engenharia earnings per share are up 6.4% per annum over the last five years.

The main way most investors will assess a company's dividend prospects is by checking the historical rate of dividend growth. Conduril - Engenharia's dividend payments are broadly unchanged compared to where they were 10 years ago.

The Bottom Line

Is Conduril - Engenharia worth buying for its dividend? Conduril - Engenharia has seen its earnings per share grow steadily and paid out less than half its profit over the last year. Unfortunately, its dividend was not well covered by free cash flow. Overall we're not hugely bearish on the stock, but there are likely better dividend investments out there.

So if you want to do more digging on Conduril - Engenharia, you'll find it worthwhile knowing the risks that this stock faces. Every company has risks, and we've spotted 5 warning signs for Conduril - Engenharia (of which 2 are potentially serious!) you should know about.

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.

Valuation is complex, but we're helping make it simple.

Find out whether Conduril - Engenharia is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.

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