Grupo Nacional Provincial, S.A.B. (BMV:GNP) Goes Ex-Dividend Soon
Regular readers will know that we love our dividends at Simply Wall St, which is why it's exciting to see Grupo Nacional Provincial, S.A.B. (BMV:GNP) is about to trade ex-dividend in the next 4 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 important because any transaction on a stock needs to have been settled before the record date in order to be eligible for a dividend. Accordingly, Grupo Nacional Provincial investors that purchase the stock on or after the 23rd of September will not receive the dividend, which will be paid on the 24th of September.
The company's next dividend payment will be Mex$3.97 per share, on the back of last year when the company paid a total of Mex$7.95 to shareholders. Based on the last year's worth of payments, Grupo Nacional Provincial stock has a trailing yield of around 7.6% on the current share price of Mex$105.00. 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! We need to see whether the dividend is covered by earnings and if it's growing.
If a company pays out more in dividends than it earned, then the dividend might become unsustainable - hardly an ideal situation. Fortunately Grupo Nacional Provincial's payout ratio is modest, at just 43% of profit.
Generally speaking, the lower a company's payout ratios, the more resilient its dividend usually is.
Check out our latest analysis for Grupo Nacional Provincial
Click here to see how much of its profit Grupo Nacional Provincial paid out over the last 12 months.
Have Earnings And Dividends Been Growing?
Companies with falling earnings are riskier for dividend shareholders. If earnings decline and the company is forced to cut its dividend, investors could watch the value of their investment go up in smoke. Grupo Nacional Provincial's earnings have collapsed faster than Wile E Coyote's schemes to trap the Road Runner; down a tremendous 41% a year over the past five years.
Many investors will assess a company's dividend performance by evaluating how much the dividend payments have changed over time. Grupo Nacional Provincial has delivered an average of 19% per year annual increase in its dividend, based on the past 10 years of dividend payments.
Final Takeaway
From a dividend perspective, should investors buy or avoid Grupo Nacional Provincial? Grupo Nacional Provincial's earnings per share are down over the past five years, although it has the cushion of a low payout ratio, which would suggest a cut to the dividend is relatively unlikely. At best we would put it on a watch-list to see if business conditions improve, as it doesn't look like a clear opportunity right now.
With that being said, if dividends aren't your biggest concern with Grupo Nacional Provincial, you should know about the other risks facing this business. To help with this, we've discovered 3 warning signs for Grupo Nacional Provincial (1 makes us a bit uncomfortable!) that you ought to be aware of before buying the shares.
If you're in the market for strong dividend payers, we recommend checking our selection of top dividend stocks.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email 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 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.