There’s a lot to love about Cementos Molins’ (BDM:CMO) upcoming €0.23 dividend

Looks like Cementos Molins, SA (BDM:CMO) is set to go ex-dividend in the next three days. The ex-dividend date is one business day before the record date, which is the latest date by which shareholders must be present on the books of the company to be eligible for payment of a dividend. The ex-dividend date is important because any trade in a share must have settled before the record date to be eligible for a dividend. Thus, you can buy shares of Cementos Molins before July 14 in order to collect the dividend that the company will pay on July 18.

The company’s next dividend is €0.23 per share, after the last 12 months, when the company distributed a total of €0.56 per share to shareholders. Based on last year’s payouts, Cementos Molins has a rolling yield of 3.6% on the current share price of €15.4. We love to see companies pay out a dividend, but it’s also important to make sure that laying the golden eggs doesn’t kill our golden hen! Therefore, readers should always check whether Cementos Molins was able to increase its dividends or if the dividend could be reduced.

See our latest analysis for Cementos Molins

If a company pays out more dividends than it has earned, the dividend may become unsustainable – a less than ideal situation. That’s why it’s good to see Cementos Molins paying out a modest 38% of its profits. Still, cash flow is even more important than earnings in evaluating a dividend, so we need to see if the company has generated enough cash to pay its distribution. It distributed 28% of its free cash flow as dividends, a comfortable level of distribution for most companies.

It is positive to see that the Cementos Molins dividend is covered by both earnings and cash flow, as this is generally a sign that the dividend is sustainable, and a lower payout ratio generally suggests a higher margin. security before the dividend is reduced.

Click here to see how much of its profit Cementos Molins has paid out over the past 12 months.

BDM:CMO Historic dividend July 10, 2022

Have earnings and dividends increased?

Companies with consistently rising earnings per share tend to create the best dividend-paying stocks because they generally find it easier to increase dividends per share. If business goes into a recession and the dividend is cut, the company could see its value drop precipitously. That’s why it’s a relief to see Cementos Molins’ earnings per share increasing by 8.8% per year over the past five years. Management reinvested more than half of the company’s profits back into the business, and the company was able to increase its profits with this retained capital. We believe this is generally an attractive combination, as dividends can increase through a combination of earnings growth and/or a higher payout ratio over time.

Another key way to gauge a company’s dividend outlook is to measure its historical rate of dividend growth. Cementos Molins has recorded dividend growth of 13% per year on average over the past 10 years. It’s encouraging to see the company increasing its dividends as earnings rise, suggesting at least some corporate interest in rewarding shareholders.

To sum up

Should investors buy Cementos Molins for the next dividend? Earnings per share rose moderately and Cementos Molins pays out less than half of its earnings and cash flow as dividends, which is an interesting combination as it suggests the company is investing in growth. It might be nice to see earnings growing faster, but Cementos Molins is cautious with its dividend payouts and could still perform reasonably well over the long term. It’s a promising combination that should mark this company worthy of attention.

Although it is tempting to invest in Cementos Molins just for the dividends, you should always be aware of the risks involved. Example: we have identified 1 warning sign for Cementos Molins you should be aware.

A common investment mistake is to buy the first good stock you see. Here you can find a complete list of high yielding dividend stocks.

This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts only using unbiased methodology and our articles are not intended to be financial advice. It is not a recommendation to buy or sell stocks and does not take into account your objectives or financial situation. Our goal is to bring you targeted long-term analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price-sensitive companies or qualitative materials. Simply Wall St has no position in the stocks mentioned.

About Tina G.

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