El Puerto de Liverpool, S.A.B. de C.V. (BMV:LIVEPOLC-1) Looks Like A Good Stock, And It's Going Ex-Dividend Soon
It looks like El Puerto de Liverpool, S.A.B. de C.V. (BMV:LIVEPOLC-1) is about to go ex-dividend in the next four days. The ex-dividend date generally occurs two days before the record date, which is the day on which shareholders need to be on the company's books in order to receive a 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. Thus, you can purchase El Puerto de Liverpool. de's shares before the 8th of October in order to receive the dividend, which the company will pay on the 9th of October.
The company's next dividend payment will be Mex$1.18 per share, on the back of last year when the company paid a total of Mex$2.95 to shareholders. Based on the last year's worth of payments, El Puerto de Liverpool. de stock has a trailing yield of around 2.9% on the current share price of Mex$101.88. If you buy this business for its dividend, you should have an idea of whether El Puerto de Liverpool. de's dividend is reliable and sustainable. So we need to check whether the dividend payments are covered, and if earnings are growing.
If a company pays out more in dividends than it earned, then the dividend might become unsustainable - hardly an ideal situation. El Puerto de Liverpool. de paid out just 21% of its profit last year, which we think is conservatively low and leaves plenty of margin for unexpected circumstances. That said, even highly profitable companies sometimes might not generate enough cash to pay the dividend, which is why we should always check if the dividend is covered by cash flow. What's good is that dividends were well covered by free cash flow, with the company paying out 14% of its cash flow last year.
It's positive to see that El Puerto de Liverpool. de's dividend is covered by both profits and cash flow, since this is generally a sign that the dividend is sustainable, and a lower payout ratio usually suggests a greater margin of safety before the dividend gets cut.
Check out our latest analysis for El Puerto de Liverpool. de
Click here to see the company's payout ratio, plus analyst estimates of its future dividends.
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. That's why it's comforting to see El Puerto de Liverpool. de's earnings have been skyrocketing, up 90% per annum for the past five years. With earnings per share growing rapidly and the company sensibly reinvesting almost all of its profits within the business, El Puerto de Liverpool. de looks like a promising growth company.
Many investors will assess a company's dividend performance by evaluating how much the dividend payments have changed over time. In the past 10 years, El Puerto de Liverpool. de has increased its dividend at approximately 12% a year on average. It's great to see earnings per share growing rapidly over several years, and dividends per share growing right along with it.
The Bottom Line
Has El Puerto de Liverpool. de got what it takes to maintain its dividend payments? We love that El Puerto de Liverpool. de is growing earnings per share while simultaneously paying out a low percentage of both its earnings and cash flow. These characteristics suggest the company is reinvesting in growing its business, while the conservative payout ratio also implies a reduced risk of the dividend being cut in the future. There's a lot to like about El Puerto de Liverpool. de, and we would prioritise taking a closer look at it.
Ever wonder what the future holds for El Puerto de Liverpool. de? See what the 12 analysts we track are forecasting, with this visualisation of its historical and future estimated earnings and cash flow
A common investing mistake is buying the first interesting stock you see. Here you can find a full list of high-yield 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.