Regular readers will know we love our dividends at Simply Wall St, which is why it’s exciting to see Westshore Terminals Investment Company (TSE: WTE) is set to trade ex-dividend within the next four days. The ex-dividend date occurs one day before the registration date which is the day on which shareholders must be entered in the books of the company to receive a dividend. It is important to know the ex-dividend date because any transaction in the share must have been settled by the registration date at the latest. Thus, you can buy the shares of Westshore Terminals Investment before June 29 in order to receive the dividend that the company will pay on July 15.
The company’s upcoming dividend is C $ 0.20 per share, continuing the past 12 months when the company has distributed a total of C $ 0.80 per share to shareholders. Calculating the value of last year’s payouts shows that Westshore Terminals Investment has a 4.7% return on the current stock price of C $ 17.16. We love to see companies pay a dividend, but it’s also important to make sure that laying the golden eggs is not going to kill our goose that lays the golden eggs! It is therefore necessary to check whether dividend payments are covered and whether profits are growing.
Check out our latest review for Westshore Terminals Investment
Dividends are usually paid out of business income, so if a business pays more than it earned, its dividend is usually at risk of being reduced. Westshore Terminals Investment paid a comfortable 34% of its profits last year. Yet cash flow is still more important than earnings in valuing a dividend, so we need to see if the company has generated enough cash to pay for its distribution. It distributed 27% of its free cash flow in the form of dividends, a comfortable level of distribution for most companies.
It is positive to see that the dividend from Westshore Terminals Investment is covered by both earnings and cash flow, as this is usually a sign that the dividend is sustainable, and a lower payout ratio usually suggests a higher. large safety margin before the dividend is cut.
Click here to view the company’s payout ratio, as well as analysts’ estimates of its future dividends.
Have profits and dividends increased?
Companies that don’t increase their profits can still be valuable, but it’s even more important to assess the sustainability of the dividend if it looks like the business will be struggling to grow. If profits fall enough, the company could be forced to cut its dividend. It is not encouraging that Westshore Terminals Investment earnings have actually been stable over the past five years. Better than seeing them fall off a cliff, of course, but the best dividend-paying stocks increase their earnings significantly over the long term.
Another key way to measure a company’s dividend outlook is to measure its historical rate of dividend growth. Westshore Terminals Investment dividend payouts per share have declined 7.7% per year on average over the past 10 years, which is not inspiring.
Is Westshore Terminals Investment an attractive dividend-paying stock, or better still, it is left on the shelf? While it’s not great to see that earnings per share are indeed stable over the 10-year period we’ve checked, at least the payout ratios are low and conservative. To sum up, Westshore Terminals Investment looks good in this analysis, although it doesn’t appear to be an exceptional opportunity.
With that in mind, an essential part of in-depth stock research is being aware of the risks stocks currently face. To help you, we have discovered 3 warning signs for Westshore Terminals Investment (1 is not a very good fit for us!) Which you should know before buying the shares.
If you are in the dividend-paying stock market, we recommend that you check out our list of the highest dividend-paying stocks with a yield above 2% and a future dividend.
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This Simply Wall St article is general in nature. It does not constitute a recommendation to buy or sell shares and does not take into account your goals or your financial situation. Our aim is to bring you long-term, targeted analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price sensitive companies or qualitative material. Simply Wall St has no position in any of the stocks mentioned.
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