In This Article:
It looks like Bird Construction Inc. (TSE:BDT) is about to go ex-dividend in the next 4 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. 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. Therefore, if you purchase Bird Construction's shares on or after the 28th of May, you won't be eligible to receive the dividend, when it is paid on the 18th of June.
The company's upcoming dividend is CA$0.033 a share, following on from the last 12 months, when the company distributed a total of CA$0.39 per share to shareholders. Based on the last year's worth of payments, Bird Construction stock has a trailing yield of around 4.0% on the current share price of CA$9.78. 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! We need to see whether the dividend is covered by earnings and if it's growing.
Check out our latest analysis for Bird Construction
If a company pays out more in dividends than it earned, then the dividend might become unsustainable - hardly an ideal situation. Bird Construction paid out a comfortable 44% of its profit last year. A useful secondary check can be to evaluate whether Bird Construction generated enough free cash flow to afford its dividend. It paid out 16% of its free cash flow as dividends last year, which is conservatively low.
It's positive to see that Bird Construction'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?
Companies with consistently growing earnings per share generally make the best dividend stocks, as they usually find it easier to grow dividends per share. If earnings decline and the company is forced to cut its dividend, investors could watch the value of their investment go up in smoke. Fortunately for readers, Bird Construction's earnings per share have been growing at 12% a year for the past five years. Earnings per share have been growing rapidly and the company is retaining a majority of its earnings 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.