CEWE Stiftung & Co. KGaA (ETR:CWC) stock is about to trade ex-dividend in 3 days. The ex-dividend date is one business day before the record date, which is the cut-off date for shareholders to be present on the company's books to be eligible for a dividend payment. The ex-dividend date is of consequence because whenever a stock is bought or sold, the trade takes at least two business day to settle. Accordingly, CEWE Stiftung KGaA investors that purchase the stock on or after the 8th of June will not receive the dividend, which will be paid on the 12th of June.
The company's upcoming dividend is €2.45 a share, following on from the last 12 months, when the company distributed a total of €2.45 per share to shareholders. Based on the last year's worth of payments, CEWE Stiftung KGaA has a trailing yield of 2.7% on the current stock price of €90.6. If you buy this business for its dividend, you should have an idea of whether CEWE Stiftung KGaA's dividend is reliable and sustainable. As a result, readers should always check whether CEWE Stiftung KGaA has been able to grow its dividends, or if the dividend might be cut.
See our latest analysis for CEWE Stiftung KGaA
If a company pays out more in dividends than it earned, then the dividend might become unsustainable - hardly an ideal situation. CEWE Stiftung KGaA paid out a comfortable 33% of its profit last year. A useful secondary check can be to evaluate whether CEWE Stiftung KGaA generated enough free cash flow to afford its dividend. Thankfully its dividend payments took up just 44% of the free cash flow it generated, which is a comfortable payout ratio.
It's positive to see that CEWE Stiftung KGaA'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.
Click here to see the company's payout ratio, plus analyst estimates of its future dividends.
Have Earnings And Dividends Been Growing?
Businesses with strong growth prospects usually make the best dividend payers, because it's easier to grow dividends when earnings per share are improving. If earnings fall far enough, the company could be forced to cut its dividend. For this reason, we're glad to see CEWE Stiftung KGaA's earnings per share have risen 10% per annum over the last five years. The company has managed to grow earnings at a rapid rate, while reinvesting most of the profits within the business. This will make it easier to fund future growth efforts and we think this is an attractive combination - plus the dividend can always be increased later.