Organización Soriana S. A. B. de C. V (BMV:SORIANAB) Could Be A Buy For Its Upcoming Dividend

It looks like Organización Soriana, S. A. B. de C. V. (BMV:SORIANAB) is about to go ex-dividend in the next 3 days. The ex-dividend date is two business days before a company's record date in most cases, which is the date on which the company determines which shareholders are entitled to receive a dividend. The ex-dividend date is an important date to be aware of as any purchase of the stock made on or after this date might mean a late settlement that doesn't show on the record date. In other words, investors can purchase Organización Soriana S. A. B. de C. V's shares before the 22nd of December in order to be eligible for the dividend, which will be paid on the 23rd of December.

The company's next dividend payment will be Mex$0.5556 per share, and in the last 12 months, the company paid a total of Mex$0.56 per share. Based on the last year's worth of payments, Organización Soriana S. A. B. de C. V stock has a trailing yield of around 1.5% on the current share price of Mex$37.99. Dividends are an important source of income to many shareholders, but the health of the business is crucial to maintaining those dividends. So we need to check whether the dividend payments are covered, and if earnings are growing.

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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. Organización Soriana S. A. B. de C. V paid out just 20% of its profit last year, which we think is conservatively low and leaves plenty of margin for unexpected circumstances.

Check out our latest analysis for Organización Soriana S. A. B. de C. V

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. This is why it's a relief to see Organización Soriana S. A. B. de C. V earnings per share are up 3.6% per annum over the last five years. Growth has been anaemic. Yet with more than 75% of its earnings being kept in the business, there is ample room to reinvest in growth or lift the payout ratio - either of which could increase the dividend.

Another key way to measure a company's dividend prospects is by measuring its historical rate of dividend growth. Organización Soriana S. A. B. de C. V has delivered 5.2% dividend growth per year on average over the past seven years. We're glad to see dividends rising alongside earnings over a number of years, which may be a sign the company intends to share the growth with shareholders.

To Sum It Up

Has Organización Soriana S. A. B. de C. V got what it takes to maintain its dividend payments? Organización Soriana S. A. B. de C. V has seen its earnings per share grow slowly in recent years, and the company reinvests more than half of its profits in the business, which generally bodes well for its future prospects. We think this is a pretty attractive combination, and would be interested in investigating Organización Soriana S. A. B. de C. V more closely.

In light of that, while Organización Soriana S. A. B. de C. V has an appealing dividend, it's worth knowing the risks involved with this stock. Be aware that Organización Soriana S. A. B. de C. V is showing 2 warning signs in our investment analysis, and 1 of those is concerning...

If you're in the market for strong dividend payers, we recommend checking our selection of top dividend stocks.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.