Four Days Left To Buy Decisive Dividend Corporation (CVE:DE) Before The Ex-Dividend Date
Readers hoping to buy Decisive Dividend Corporation (CVE:DE) for its dividend will need to make their move shortly, as the stock is about to trade ex-dividend. The ex-dividend date occurs one day before the record date which is the day on which shareholders need to be on the company's books in order to receive a dividend. The ex-dividend date is of consequence because whenever a stock is bought or sold, the trade takes at least two business day to settle. This means that investors who purchase Decisive Dividend's shares on or after the 28th of September will not receive the dividend, which will be paid on the 15th of October.
The company's next dividend payment will be CA$0.025 per share, and in the last 12 months, the company paid a total of CA$0.24 per share. Based on the last year's worth of payments, Decisive Dividend stock has a trailing yield of around 7.5% on the current share price of CA$4. 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 Decisive Dividend can afford its dividend, and if the dividend could grow.
Check out our latest analysis for Decisive Dividend
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. Decisive Dividend paid out 58% of its earnings to investors last year, a normal payout level for most businesses. A useful secondary check can be to evaluate whether Decisive Dividend generated enough free cash flow to afford its dividend. Luckily it paid out just 6.7% of its free cash flow last year.
It's positive to see that Decisive Dividend'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 Decisive Dividend paid out over the last 12 months.
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. Investors love dividends, so if earnings fall and the dividend is reduced, expect a stock to be sold off heavily at the same time. With that in mind, we're not enthused to see that Decisive Dividend'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.
Another key way to measure a company's dividend prospects is by measuring its historical rate of dividend growth. Decisive Dividend has delivered 3.8% dividend growth per year on average over the past six years.
Final Takeaway
Is Decisive Dividend worth buying for its dividend? The payout ratios appear reasonably conservative, which implies the dividend may be somewhat sustainable. Still, with earnings basically flat, Decisive Dividend doesn't stand out from a dividend perspective. In summary, it's hard to get excited about Decisive Dividend from a dividend perspective.
So if you want to do more digging on Decisive Dividend, you'll find it worthwhile knowing the risks that this stock faces. To help with this, we've discovered 5 warning signs for Decisive Dividend (1 is potentially serious!) that you ought to be aware of before buying the shares.
We wouldn't recommend just buying the first dividend stock you see, though. Here's a list of interesting dividend stocks with a greater than 2% yield and an upcoming dividend.
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.
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