Only Four Days Left To Cash In On Inversiones Unespa's (SNSE:UNESPA) Dividend
It looks like Inversiones Unespa S.A. (SNSE:UNESPA) is about to go ex-dividend in the next 4 days. The ex-dividend date is commonly two business days 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 important because any transaction on a stock needs to have been settled before the record date in order to be eligible for a dividend. Meaning, you will need to purchase Inversiones Unespa's shares before the 11th of September to receive the dividend, which will be paid on the 16th of September.
The company's upcoming dividend is CL$10.00 a share, following on from the last 12 months, when the company distributed a total of CL$35.06 per share to shareholders. Based on the last year's worth of payments, Inversiones Unespa stock has a trailing yield of around 8.3% on the current share price of CL$420.00. Dividends are an important source of income to many shareholders, but the health of the business is crucial to maintaining those dividends. We need to see whether the dividend is covered by earnings and if it's growing.
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. Inversiones Unespa is paying out an acceptable 63% of its profit, a common payout level among most companies. A useful secondary check can be to evaluate whether Inversiones Unespa generated enough free cash flow to afford its dividend. Over the last year it paid out 71% of its free cash flow as dividends, within the usual range for most companies.
It's encouraging to see that the dividend is covered by both profit and cash flow. This generally suggests the dividend is sustainable, as long as earnings don't drop precipitously.
Check out our latest analysis for Inversiones Unespa
Click here to see how much of its profit Inversiones Unespa paid out over the last 12 months.
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. That's why it's comforting to see Inversiones Unespa's earnings have been skyrocketing, up 26% per annum for the past five years. The current payout ratio suggests a good balance between rewarding shareholders with dividends, and reinvesting in growth. Earnings per share have been growing quickly and in combination with some reinvestment and a middling payout ratio, the stock may have decent dividend prospects going forwards.
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, 10 years ago, Inversiones Unespa has lifted its dividend by approximately 4.3% 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
Is Inversiones Unespa an attractive dividend stock, or better left on the shelf? Higher earnings per share generally lead to higher dividends from dividend-paying stocks over the long run. That's why we're glad to see Inversiones Unespa's earnings per share growing, although as we saw, the company is paying out more than half of its earnings and cashflow - 63% and 71% respectively. Overall we're not hugely bearish on the stock, but there are likely better dividend investments out there.
While it's tempting to invest in Inversiones Unespa for the dividends alone, you should always be mindful of the risks involved. For example, we've found 3 warning signs for Inversiones Unespa (1 doesn't sit too well with us!) that deserve your attention before investing in the shares.
A common investing mistake is buying the first interesting stock you see. Here you can find a full list of high-yield 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.