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It looks like Grupo Catalana Occidente, S.A. (BME:GCO) is about to go ex-dividend in the next 4 days. You can purchase shares before the 10th of February in order to receive the dividend, which the company will pay on the 12th of February.
Grupo Catalana Occidente's next dividend payment will be €0.13 per share. Last year, in total, the company distributed €0.82 to shareholders. Looking at the last 12 months of distributions, Grupo Catalana Occidente has a trailing yield of approximately 2.8% on its current stock price of €29.7. Dividends are a major contributor to investment returns for long term holders, but only if the dividend continues to be paid. We need to see whether the dividend is covered by earnings and if it's growing.
View our latest analysis for Grupo Catalana Occidente
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. Grupo Catalana Occidente is paying out just 11% of its profit after tax, which is comfortably low and leaves plenty of breathing room in the case of adverse events.
Generally speaking, the lower a company's payout ratios, the more resilient its dividend usually is.
Click here to see the company's payout ratio, plus analyst estimates of its future dividends.
Have Earnings And Dividends Been Growing?
Stocks in companies that generate sustainable earnings growth often make the best dividend prospects, as it is easier to lift the dividend when earnings are rising. Investors love dividends, so if earnings fall and the dividend is reduced, expect a stock to be sold off heavily at the same time. For this reason, we're glad to see Grupo Catalana Occidente's earnings per share have risen 11% per annum over the last five years.
Many investors will assess a company's dividend performance by evaluating how much the dividend payments have changed over time. Since the start of our data, ten years ago, Grupo Catalana Occidente has lifted its dividend by approximately 4.9% a year on average. It's good to see both earnings and the dividend have improved - although the former has been rising much quicker than the latter, possibly due to the company reinvesting more of its profits in growth.
Final Takeaway
Should investors buy Grupo Catalana Occidente for the upcoming dividend? When companies are growing rapidly and retaining a majority of the profits within the business, it's usually a sign that reinvesting earnings creates more value than paying dividends to shareholders. Perhaps even more importantly - this can sometimes signal management is focused on the long term future of the business. Grupo Catalana Occidente ticks a lot of boxes for us from a dividend perspective, and we think these characteristics should mark the company as deserving of further attention.