It looks like Circa Enterprises Inc. (CVE:CTO) is about to go ex-dividend in the next 4 days. You can purchase shares before the 19th of December in order to receive the dividend, which the company will pay on the 8th of January.
Circa Enterprises's next dividend payment will be CA$0.06 per share, and in the last 12 months, the company paid a total of CA$0.06 per share. Last year's total dividend payments show that Circa Enterprises has a trailing yield of 5.8% on the current share price of CA$1.03. Dividends are a major contributor to investment returns for long term holders, but only if the dividend continues to be paid. So we need to investigate whether Circa Enterprises can afford its dividend, and if the dividend could grow.
Check out our latest analysis for Circa Enterprises
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.
Click here to see how much of its profit Circa Enterprises paid out over the last 12 months.
Have Earnings And Dividends Been Growing?
Stocks with flat earnings can still be attractive dividend payers, but it is important to be more conservative with your approach and demand a greater margin for safety when it comes to dividend sustainability. If earnings decline and the company is forced to cut its dividend, investors could watch the value of their investment go up in smoke. That explains why we're not overly excited about Circa Enterprises's flat earnings over the past five years. We'd take that over an earnings decline any day, but in the long run, the best dividend stocks all grow their earnings per share. Earnings per share growth in recent times has not been a standout. Yet there are several ways to grow the dividend, and one of them is simply that the company may choose to pay out more of its earnings as dividends.
Another key way to measure a company's dividend prospects is by measuring its historical rate of dividend growth. In the last four years, Circa Enterprises has lifted its dividend by approximately 4.7% a year on average.
To Sum It Up
Is Circa Enterprises an attractive dividend stock, or better left on the shelf? Circa Enterprises has seen its earnings per share stagnate in recent years, although the company reinvests more than half of its profits in the business, which could bode well for its future prospects. We think this is a pretty attractive combination, and would be interested in investigating Circa Enterprises more closely.
Want to learn more about Circa Enterprises? Here's a visualisation of its historical rate of revenue and earnings growth.