Stock Analysis

Four Days Left To Buy Qatar Fuel Company Q.P.S.C.("WOQOD") (DSM:QFLS) Before The Ex-Dividend Date

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Qatar Fuel Company Q.P.S.C.("WOQOD") (DSM:QFLS) is about to trade ex-dividend in the next four days. The ex-dividend date is one business day 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 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 Qatar Fuel Company Q.P.S.C.(WOQOD)'s shares on or after the 28th of February will not receive the dividend, which will be paid on the 1st of January.

The company's next dividend payment will be ر.ق0.76 per share, which looks like a nice increase on last year, when the company distributed a total of ر.ق0.46 to shareholders. If you buy this business for its dividend, you should have an idea of whether Qatar Fuel Company Q.P.S.C.(WOQOD)'s dividend is reliable and sustainable. We need to see whether the dividend is covered by earnings and if it's growing.

Check out our latest analysis for Qatar Fuel Company Q.P.S.C.(WOQOD)

If a company pays out more in dividends than it earned, then the dividend might become unsustainable - hardly an ideal situation. That's why it's good to see Qatar Fuel Company Q.P.S.C.(WOQOD) paying out a modest 47% of its earnings. Yet cash flows are even more important than profits for assessing a dividend, so we need to see if the company generated enough cash to pay its distribution. It distributed 47% of its free cash flow as dividends, a comfortable payout level for most companies.

It's positive to see that Qatar Fuel Company Q.P.S.C.(WOQOD)'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.

Click here to see how much of its profit Qatar Fuel Company Q.P.S.C.(WOQOD) paid out over the last 12 months.

DSM:QFLS Historic Dividend February 23rd 2022

Have Earnings And Dividends Been Growing?

Stocks with flat earnings can still be attractive dividend payers, but it is important to be more conservative with your approach and demand a greater margin for safety when it comes to dividend sustainability. If earnings fall far enough, the company could be forced to cut its dividend. With that in mind, we're not enthused to see that Qatar Fuel Company Q.P.S.C.(WOQOD)'s earnings per share have remained effectively flat over the past five years. It's better than seeing them drop, certainly, but over the long term, all of the best dividend stocks are able to meaningfully grow their earnings per share.

Many investors will assess a company's dividend performance by evaluating how much the dividend payments have changed over time. Qatar Fuel Company Q.P.S.C.(WOQOD) has delivered an average of 1.0% per year annual increase in its dividend, based on the past 10 years of dividend payments.

To Sum It Up

Is Qatar Fuel Company Q.P.S.C.(WOQOD) an attractive dividend stock, or better left on the shelf? Earnings per share have been flat, although at least the company is paying out a low and conservative percentage of both its earnings and cash flow. It's definitely not great to see earnings falling, but at least there may be some buffer before the dividend gets cut. While it does have some good things going for it, we're a bit ambivalent and it would take more to convince us of Qatar Fuel Company Q.P.S.C.(WOQOD)'s dividend merits.

Keen to explore more data on Qatar Fuel Company Q.P.S.C.(WOQOD)'s financial performance? Check out our visualisation of its historical revenue and earnings growth.

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

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

Find out whether Qatar Fuel Company Q.P.S.C. (WOQOD) 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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