Yahoo Finance Don't Race Out To Buy C-Com Satellite Systems Inc. (CVE:CMI) Just Because It's Going Ex-Dividend
Readers hoping to buy C-Com Satellite Systems Inc. (CVE:CMI) for its dividend will need to make their move shortly, as the stock is about to trade ex-dividend. The ex-dividend date is one business day before a company's record date, which is the date on which the company determines which shareholders are entitled to receive a dividend. 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. In other words, investors can purchase C-Com Satellite Systems' shares before the 31st of October in order to be eligible for the dividend, which will be paid on the 15th of November.
The company's next dividend payment will be CA$0.013 per share. Last year, in total, the company distributed CA$0.05 to shareholders. Last year's total dividend payments show that C-Com Satellite Systems has a trailing yield of 4.9% on the current share price of CA$1.03. If you buy this business for its dividend, you should have an idea of whether C-Com Satellite Systems's dividend is reliable and sustainable. As a result, readers should always check whether C-Com Satellite Systems has been able to grow its dividends, or if the dividend might be cut.
Check out our latest analysis for C-Com Satellite Systems
Dividends are typically paid from company earnings. If a company pays more in dividends than it earned in profit, then the dividend could be unsustainable. C-Com Satellite Systems lost money last year, so the fact that it's paying a dividend is certainly disconcerting. There might be a good reason for this, but we'd want to look into it further before getting comfortable. With the recent loss, it's important to check if the business generated enough cash to pay its dividend. If C-Com Satellite Systems didn't generate enough cash to pay the dividend, then it must have either paid from cash in the bank or by borrowing money, neither of which is sustainable in the long term.
Click here to see how much of its profit C-Com Satellite Systems paid out over the last 12 months.
Have Earnings And Dividends Been Growing?
When earnings decline, dividend companies become much harder to analyse and own safely. If earnings fall far enough, the company could be forced to cut its dividend. C-Com Satellite Systems reported a loss last year, and the general trend suggests its earnings have also been declining in recent years, making us wonder if the dividend is at risk.
Another key way to measure a company's dividend prospects is by measuring its historical rate of dividend growth. C-Com Satellite Systems has delivered 5.2% dividend growth per year on average over the past 10 years.
Get our latest analysis on C-Com Satellite Systems's balance sheet health here.
To Sum It Up
Has C-Com Satellite Systems got what it takes to maintain its dividend payments? First, it's not great to see the company paying a dividend despite being loss-making over the last year. Second, the dividend was not well covered by cash flow." It's not that we think C-Com Satellite Systems is a bad company, but these characteristics don't generally lead to outstanding dividend performance.
Having said that, if you're looking at this stock without much concern for the dividend, you should still be familiar of the risks involved with C-Com Satellite Systems. Every company has risks, and we've spotted 4 warning signs for C-Com Satellite Systems (of which 2 are concerning!) you should know about.
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.
