Regular readers know that we love Simply Wall Street Dividends. Carlton Investments Co., Ltd. (ASX:CIN) is scheduled to trade ex-dividend over the next four days. The ex-dividend date is one day before the record date. The record date is the date on which a shareholder must appear on the company's books in order to receive the dividend. The ex-dividend date is important because the settlement process takes two full business days. Therefore, if you miss that date, it will not be recorded on the company's books on the record date. This means investors can purchase Carlton Investments stock by February 29th in order to receive the dividend, which will be paid on March 18th.
The company's next dividend payment will be AUD 0.41 per share. Last year, the company distributed a total of AU$1.01 to shareholders. Based on the last year's worth of payments, Carlton Investments has a current yield of 3.3% on the current stock price of AU$30.30. If you buy this business for its dividend, you need to understand whether Carlton Investments's dividend is reliable and sustainable. That's why we should always check whether the dividend payments are sustainable, and if the company is growing.
Check out our latest analysis for Carlton Investments.
Dividends are typically paid out of company profits, so if a company pays out more than it earned, its dividend is usually at a higher risk of being cut. Carlton Investments pays out 70% of its profit margin, which is a common payout level for most companies.
Companies that pay out less in dividends than they earned in profit generally have more sustainable dividends. The lower the payout ratio, the more leeway a company has before being forced to cut its dividend.
Click here to see how much profit Carlton Investments paid out in the last twelve months.
Are profits and dividends growing?
A company without growing earnings can potentially have value, but if you think a company will struggle to grow, then assessing the sustainability of its dividend is even more important. If profits decline and the company is forced to cut its dividend, investors could see the value of their investments explode. It's not encouraging to see that Carlton Investments' earnings have remained essentially flat over the past five years. Declining earnings are always acceptable, but over the long term, all the best dividend stocks grow earnings per share.
The main way most investors assess a company's dividend prospects is by looking at its historical dividend growth rate. Over the past 10 years, Carlton Investments has raised its dividend by an average of about 0.9% per year.
conclusion
From a dividend perspective, should investors buy or avoid Carlton Investments? Earnings per share haven't grown at all, and the company pays out just over half of its profits to shareholders. This isn't a very attractive combination of features, and we're not very interested in this company's dividend.
So if you're still interested in Carlton Investments despite its poor dividend quality, you should be well-informed about some of the risks this stock faces. For example, I found that: 2 warning signs for Carlton Investments (1 is important!) Worth noting before investing in stocks.
If you're in the market looking for high dividends, we recommend: Check out our selection of high-dividend stocks.
Have feedback on this article? Curious about its content? contact Please contact us directly. Alternatively, email our 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 using only unbiased methodologies, and articles are not intended to be financial advice. This is not a recommendation to buy or sell any stock, and does not take into account your objectives or financial situation. We aim to provide long-term, focused analysis based on fundamental data. Note that our analysis may not factor in the latest announcements or qualitative material from price-sensitive companies. Simply Wall St has no position in any stocks mentioned.
