Is It Smart To Buy Comelf S.A. (BVB:CMF) Before It Goes Ex-Dividend?

Readers hoping to buy Comelf S.A. (BVB:CMF) 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 an important date to be aware of as any purchase of the stock made on or after this date might mean a late settlement that doesn't show on the record date. Meaning, you will need to purchase Comelf's shares before the 13th of November to receive the dividend, which will be paid on the 29th of November.

The upcoming dividend for Comelf will put a total of RON0.21 per share in shareholders' pockets, up from last year's total dividends of RON0.18. 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 investigate whether Comelf can afford its dividend, and if the dividend could grow.

View our latest analysis for Comelf

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. Comelf paid out more than half (60%) of its earnings last year, which is a regular payout ratio for most companies.

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

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. For this reason, we're glad to see Comelf's earnings per share have risen 15% per annum over the last five years. Comelf is paying out a bit over half its earnings, which suggests the company is striking a balance between reinvesting in growth, and paying dividends. This is a reasonable combination that could hint at some further dividend increases in the future.

The main way most investors will assess a company's dividend prospects is by checking the historical rate of dividend growth. Comelf has seen its dividend decline 0.7% per annum on average over the past eight years, which is not great to see.

The Bottom Line

Has Comelf got what it takes to maintain its dividend payments? Comelf has an acceptable payout ratio and its earnings per share have been improving at a decent rate. Overall, Comelf looks like a promising dividend stock in this analysis, and we think it would be worth investigating further.

With that in mind, a critical part of thorough stock research is being aware of any risks that stock currently faces. Our analysis shows 3 warning signs for Comelf that we strongly recommend you have a look at before investing in the company.

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.