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It looks like Molson Coors Beverage Company (NYSE:TAP) is about to go ex-dividend in the next four days. The ex-dividend date is one business day before a company's record date, which is the date on which the company determines which shareholders are entitled to receive a dividend. It is important to be aware of the ex-dividend date because any trade on the stock needs to have been settled on or before the record date. Accordingly, Molson Coors Beverage investors that purchase the stock on or after the 6th of December will not receive the dividend, which will be paid on the 20th of December.
The company's next dividend payment will be US$0.44 per share. Last year, in total, the company distributed US$1.76 to shareholders. Based on the last year's worth of payments, Molson Coors Beverage stock has a trailing yield of around 2.8% on the current share price of US$62.06. If you buy this business for its dividend, you should have an idea of whether Molson Coors Beverage's dividend is reliable and sustainable. As a result, readers should always check whether Molson Coors Beverage has been able to grow its dividends, or if the dividend might be cut.
See our latest analysis for Molson Coors Beverage
Dividends are typically paid out of company income, so if a company pays out more than it earned, its dividend is usually at a higher risk of being cut. That's why it's good to see Molson Coors Beverage paying out a modest 39% of its earnings. 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. It distributed 32% of its free cash flow as dividends, a comfortable payout level for most companies.
It's encouraging to see that the dividend is covered by both profit and cash flow. This generally suggests the dividend is sustainable, as long as earnings don't drop precipitously.
Click here to see the company's payout ratio, plus analyst estimates of its future dividends.
Have Earnings And Dividends Been Growing?
When earnings decline, dividend companies become much harder to analyse and own safely. If business enters a downturn and the dividend is cut, the company could see its value fall precipitously. So we're not too excited that Molson Coors Beverage's earnings are down 2.5% 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. In the last 10 years, Molson Coors Beverage has lifted its dividend by approximately 1.7% a year on average.