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Celebrus Technologies plc (LON:CLBS) stock is about to trade ex-dividend in four 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. In other words, investors can purchase Celebrus Technologies' shares before the 18th of July in order to be eligible for the dividend, which will be paid on the 16th of August.
The company's next dividend payment will be UK£0.0223 per share, and in the last 12 months, the company paid a total of UK£0.032 per share. Based on the last year's worth of payments, Celebrus Technologies has a trailing yield of 1.2% on the current stock price of UK£2.55. If you buy this business for its dividend, you should have an idea of whether Celebrus Technologies's dividend is reliable and sustainable. We need to see whether the dividend is covered by earnings and if it's growing.
View our latest analysis for Celebrus Technologies
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. Celebrus Technologies paid out a comfortable 31% of its profit last year. Yet cash flows are even more important than profits for assessing a dividend, so we need to see if the company generated enough cash to pay its distribution. Luckily it paid out just 8.0% of its free cash flow last year.
It's positive to see that Celebrus Technologies'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?
When earnings decline, dividend companies become much harder to analyse and own safely. If earnings decline and the company is forced to cut its dividend, investors could watch the value of their investment go up in smoke. Readers will understand then, why we're concerned to see Celebrus Technologies's earnings per share have dropped 7.1% a year over the past five years. Ultimately, when earnings per share decline, the size of the pie from which dividends can be paid, shrinks.
Many investors will assess a company's dividend performance by evaluating how much the dividend payments have changed over time. Celebrus Technologies has delivered 7.0% dividend growth per year on average over the past 10 years.