Three Days Left Until AS Commercial Industrial Company of Computers and Toys S.A. (ATH:ASCO) Trades Ex-Dividend
Readers hoping to buy AS Commercial Industrial Company of Computers and Toys S.A. (ATH:ASCO) for its dividend will need to make their move shortly, as the stock is about to trade ex-dividend. The ex-dividend date is commonly two business days 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 of consequence because whenever a stock is bought or sold, the trade can take two business days or more to settle. This means that investors who purchase AS Commercial Industrial Company of Computers and Toys' shares on or after the 16th of December will not receive the dividend, which will be paid on the 22nd of December.
The company's next dividend payment will be €0.06 per share, and in the last 12 months, the company paid a total of €0.17 per share. Calculating the last year's worth of payments shows that AS Commercial Industrial Company of Computers and Toys has a trailing yield of 4.2% on the current share price of €4.07. Dividends are a major contributor to investment returns for long term holders, but only if the dividend continues to be paid. That's why we should always check whether the dividend payments appear sustainable, and if the company is growing.
Dividends are usually paid out of company profits, so if a company pays out more than it earned then its dividend is usually at greater risk of being cut. AS Commercial Industrial Company of Computers and Toys paid out more than half (54%) of its earnings last year, which is a regular payout ratio for most companies. Yet cash flow is typically more important than profit for assessing dividend sustainability, so we should always check if the company generated enough cash to afford its dividend. It paid out more than half (58%) of its free cash flow in the past year, which is within an average range for most companies.
It's encouraging to see that the dividend is covered by both profit and cash flow. This generally suggests the dividend is sustainable, as long as earnings don't drop precipitously.
See our latest analysis for AS Commercial Industrial Company of Computers and Toys
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. With that in mind, we're encouraged by the steady growth at AS Commercial Industrial Company of Computers and Toys, with earnings per share up 6.1% on average over the last five years. While earnings have been growing at a credible rate, the company is paying out a majority of its earnings to shareholders. If management lifts the payout ratio further, we'd take this as a tacit signal that the company's growth prospects are slowing.
Many investors will assess a company's dividend performance by evaluating how much the dividend payments have changed over time. AS Commercial Industrial Company of Computers and Toys has delivered an average of 11% per year annual increase in its dividend, based on the past 10 years of dividend payments. We're glad to see dividends rising alongside earnings over a number of years, which may be a sign the company intends to share the growth with shareholders.
The Bottom Line
Should investors buy AS Commercial Industrial Company of Computers and Toys for the upcoming dividend? Earnings per share have been growing modestly and AS Commercial Industrial Company of Computers and Toys paid out a bit over half of its earnings and free cash flow last year. Overall, it's hard to get excited about AS Commercial Industrial Company of Computers and Toys from a dividend perspective.
With that being said, if dividends aren't your biggest concern with AS Commercial Industrial Company of Computers and Toys, you should know about the other risks facing this business. In terms of investment risks, we've identified 2 warning signs with AS Commercial Industrial Company of Computers and Toys and understanding them should be part of your investment process.
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.