Cibus Real Estate AB (publ) (STO:CIBUS) Will Pay A €0.07 Dividend In Three Days
Cibus Real Estate AB (publ) (STO:CIBUS) stock is about to trade ex-dividend in three days. The ex-dividend date is usually set to be two business days 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 of consequence because whenever a stock is bought or sold, the trade can take two business days or more to settle. In other words, investors can purchase Cibus Real Estate's shares before the 26th of August in order to be eligible for the dividend, which will be paid on the 3rd of September.
The company's next dividend payment will be €0.07 per share, on the back of last year when the company paid a total of €0.90 to shareholders. Looking at the last 12 months of distributions, Cibus Real Estate has a trailing yield of approximately 7.0% on its current stock price of kr0142.20. We love seeing companies pay a dividend, but it's also important to be sure that laying the golden eggs isn't going to kill our golden goose! 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. Its dividend payout ratio is 87% of profit, which means the company is paying out a majority of its earnings. The relatively limited profit reinvestment could slow the rate of future earnings growth. We'd be worried about the risk of a drop in earnings. 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. Over the last year it paid out 51% of its free cash flow as dividends, within the usual 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.
Check out our latest analysis for Cibus Real Estate
Click here to see the company's payout ratio, plus analyst estimates of its future dividends.
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. If earnings fall far enough, the company could be forced to cut its dividend. That explains why we're not overly excited about Cibus Real Estate's flat earnings 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. A high payout ratio of 87% generally happens when a company can't find better uses for the cash. Combined with slim earnings growth in the past few years, Cibus Real Estate could be signalling that its future growth prospects are thin.
The main way most investors will assess a company's dividend prospects is by checking the historical rate of dividend growth. Cibus Real Estate has delivered 1.5% dividend growth per year on average over the past eight years.
Final Takeaway
From a dividend perspective, should investors buy or avoid Cibus Real Estate? Earnings per share have barely grown, and although Cibus Real Estate paid out over half its earnings and free cash flow last year, the payout ratios are within a normal range for most companies. Overall, it's hard to get excited about Cibus Real Estate from a dividend perspective.
However if you're still interested in Cibus Real Estate as a potential investment, you should definitely consider some of the risks involved with Cibus Real Estate. For example, Cibus Real Estate has 2 warning signs (and 1 which is a bit concerning) we think you should know about.
A common investing mistake is buying the first interesting stock you see. Here you can find a full list of high-yield 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.