MPM Corpóreos S.A. (BVMF:ESPA3) Stock Goes Ex-Dividend In Just Three Days

MPM Corpóreos S.A. (BVMF:ESPA3) is about to trade ex-dividend in the next 3 days. The ex-dividend date is usually set to be two business days before the record date, which is the cut-off date on which you must be present on the company's books as a shareholder in order to receive the 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. Thus, you can purchase MPM Corpóreos' shares before the 2nd of January in order to receive the dividend, which the company will pay on the 7th of January.

The company's upcoming dividend is R$0.037596 a share, following on from the last 12 months, when the company distributed a total of R$0.028 per share to shareholders. Based on the last year's worth of payments, MPM Corpóreos has a trailing yield of 2.8% on the current stock price of R$0.99. If you buy this business for its dividend, you should have an idea of whether MPM Corpóreos's dividend is reliable and sustainable. That's why we should always check whether the dividend payments appear sustainable, and if the company is growing.

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If a company pays out more in dividends than it earned, then the dividend might become unsustainable - hardly an ideal situation. MPM Corpóreos is paying out just 5.3% of its profit after tax, which is comfortably low and leaves plenty of breathing room in the case of adverse events. A useful secondary check can be to evaluate whether MPM Corpóreos generated enough free cash flow to afford its dividend. It paid out 0.7% of its free cash flow as dividends last year, which is conservatively low.

It's positive to see that MPM Corpóreos's dividend is covered by both profits and cash flow, since this is generally a sign that the dividend is sustainable, and a lower payout ratio usually suggests a greater margin of safety before the dividend gets cut.

See our latest analysis for MPM Corpóreos

Click here to see how much of its profit MPM Corpóreos paid out over the last 12 months.

Have Earnings And Dividends Been Growing?

Companies with falling earnings are riskier for dividend shareholders. If earnings fall far enough, the company could be forced to cut its dividend. MPM Corpóreos's earnings have collapsed faster than Wile E Coyote's schemes to trap the Road Runner; down a tremendous 36% a year over the past five years.

Many investors will assess a company's dividend performance by evaluating how much the dividend payments have changed over time. MPM Corpóreos has seen its dividend decline 14% per annum on average over the past five years, which is not great to see. It's never nice to see earnings and dividends falling, but at least management has cut the dividend rather than potentially risk the company's health in an attempt to maintain it.

Final Takeaway

Is MPM Corpóreos an attractive dividend stock, or better left on the shelf? MPM Corpóreos has comfortably low cash and profit payout ratios, which may mean the dividend is sustainable even in the face of a sharp decline in earnings per share. Still, we consider declining earnings to be a warning sign. All things considered, we are not particularly enthused about MPM Corpóreos from a dividend perspective.

So while MPM Corpóreos looks good from a dividend perspective, it's always worthwhile being up to date with the risks involved in this stock. Our analysis shows 2 warning signs for MPM Corpóreos that we strongly recommend you have a look at before investing in the company.

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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.