Carlton Investments Ltd. (ASX:CIN) is about to trade ex-dividend in the next 3 days. The ex-dividend date is usually set to be one business day 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 an important date to be aware of as any purchase of the stock made on or after this date might mean a late settlement that doesn’t show on the record date. Thus, you can purchase Carlton Investments’ shares before the 30th of August in order to receive the dividend, which the company will pay on the 16th of September.
The company’s next dividend payment will be AU$0.63 per share, on the back of last year when the company paid a total of AU$1.04 to shareholders. Looking at the last 12 months of distributions, Carlton Investments has a trailing yield of approximately 3.4% on its current stock price of AU$30.60. 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! As a result, readers should always check whether Carlton Investments has been able to grow its dividends, or if the dividend might be cut.
See our latest analysis for Carlton Investments
Dividends are typically paid from company earnings. If a company pays more in dividends than it earned in profit, then the dividend could be unsustainable. Carlton Investments paid out more than half (71%) of its earnings last year, which is a regular payout ratio for most companies.
Generally speaking, the lower a company’s payout ratios, the more resilient its dividend usually is.
Click here to see how much of its profit Carlton Investments paid out over the last 12 months.
Have Earnings And Dividends Been Growing?
Businesses with shrinking earnings are tricky from a dividend perspective. If earnings fall far enough, the company could be forced to cut its dividend. So we’re not too excited that Carlton Investments’s earnings are down 3.1% 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. Carlton Investments’s dividend payments are effectively flat on where they were 10 years ago. If a company’s dividend stays flat while earnings are in decline, this is typically a sign that it is paying out a larger percentage of its earnings. This can become unsustainable if earnings fall far enough.
The Bottom Line
Is Carlton Investments worth buying for its dividend? We’re not overly enthused to see Carlton Investments’s earnings in retreat at the same time as the company is paying out more than half of its earnings as dividends to shareholders. All things considered, we’re not optimistic about its dividend prospects, and would be inclined to leave it on the shelf for now.
With that being said, if you’re still considering Carlton Investments as an investment, you’ll find it beneficial to know what risks this stock is facing. Be aware that Carlton Investments is showing 2 warning signs in our investment analysis, and 1 of those makes us a bit uncomfortable…
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.
