International company Standex (NYSE: SXI) is set to trade off dividend within the next 3 days. The ex-dividend date occurs one day before the record date, which is the day on which shareholders must be on the books of the company to receive a dividend. The ex-dividend date is important because any share transaction must have been settled before the registration date to be eligible for a dividend. This means that you will have to buy shares of Standex International by November 5 to receive the dividend, which will be paid on November 24.
The company’s next dividend payment will be US $ 0.26 per share, and over the past 12 months the company has paid a total of US $ 0.96 per share. Looking at the last 12 months of distributions, Standex International has a rolling return of approximately 0.9% on its current price of $ 111.27. We love to see companies pay a dividend, but it’s also important to be sure that laying the golden eggs isn’t going to kill our goose that lays the golden eggs! Therefore, readers should always check whether Standex International has been able to increase its dividends or if the dividend could be reduced.
See our latest analysis for Standex International
Dividends are usually paid out of the company’s profits, so if a company pays more than it earned, its dividend is usually at risk of being reduced. Standex International paid a comfortable 30% of its profit last year. Yet cash flow is still more important than earnings in valuing a dividend, so we need to see if the company has generated enough cash to pay for its distribution. Fortunately, he only paid 19% of his free cash flow last year.
It is encouraging to see that the dividend is covered by both earnings and cash flow. This usually suggests that the dividend is sustainable, as long as profits don’t drop sharply.
Click here to view the company’s payout ratio, as well as analysts’ estimates of its future dividends.
Have profits and dividends increased?
When profits fall, dividend companies become much more difficult to analyze and safely own. Investors love dividends, so if profits fall and the dividend is reduced, expect a stock to be sold massively at the same time. Readers will then understand why we are concerned that Standex International’s earnings per share have fallen 5.1% per year over the past five years. Ultimately, when earnings per share declines, the size of the pie from which dividends can be paid declines.
Many investors will assess a company’s dividend performance by evaluating how much dividend payments have changed over time. Standex International has generated dividend growth of 16% per year on average over the past 10 years.
The bottom line
Is Standex International an attractive dividend-paying stock, or better still, is it left in the store? Standex International has comfortably low cash flow and earnings payout ratios, which can mean that the dividend is sustainable even in the face of a sharp decline in earnings per share. Nonetheless, we see falling profits as a warning sign. Overall, it’s hard to get excited about Standex International from a dividend perspective.
With that in mind, an essential part of in-depth stock research is being aware of the risks stocks currently face. In terms of investment risks, we have identified 2 warning signs with Standex International and understanding them should be part of your investment process.
However, we don’t recommend simply buying the first dividend stock you see. Here is a list of interesting dividend paying stocks with a yield above 2% and a dividend coming soon.
This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts using only 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 into account your goals or your financial situation. Our aim is to bring you long-term, targeted analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price sensitive companies or qualitative documents. Simply Wall St has no position in any of the stocks mentioned.
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