Emaar Properties PJSC (DFM:EMAAR) Looks Like A Good Stock, And It's Going Ex-Dividend Soon

Readers hoping to buy Emaar Properties PJSC (DFM:EMAAR) for its dividend will need to make their move shortly, as the stock is about to trade ex-dividend. The ex-dividend date generally occurs two days before the record date, which is the day on which shareholders need to be on the company's books in order 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 Emaar Properties PJSC's shares before the 13th of November in order to be eligible for the dividend, which will be paid on the 27th of November.

The company's next dividend payment will be د.إ0.50 per share, and in the last 12 months, the company paid a total of د.إ1.00 per share. Calculating the last year's worth of payments shows that Emaar Properties PJSC has a trailing yield of 8.0% on the current share price of د.إ12.50. Dividends are a major contributor to investment returns for long term holders, but only if the dividend continues to be paid. So we need to check whether the dividend payments are covered, and if earnings are 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. Fortunately Emaar Properties PJSC's payout ratio is modest, at just 46% of profit. That said, even highly profitable companies sometimes might not generate enough cash to pay the dividend, which is why we should always check if the dividend is covered by cash flow. It distributed 37% of its free cash flow as dividends, a comfortable payout level for most companies.

It's positive to see that Emaar Properties PJSC'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.

Check out our latest analysis for Emaar Properties PJSC

Click here to see the company's payout ratio, plus analyst estimates of its future dividends.

Have Earnings And Dividends Been Growing?

Businesses with strong growth prospects usually make the best dividend payers, because it's easier to grow dividends when earnings per share are improving. If earnings decline and the company is forced to cut its dividend, investors could watch the value of their investment go up in smoke. It's encouraging to see Emaar Properties PJSC has grown its earnings rapidly, up 49% a year for the past five years. Emaar Properties PJSC is paying out less than half its earnings and cash flow, while simultaneously growing earnings per share at a rapid clip. Companies with growing earnings and low payout ratios are often the best long-term dividend stocks, as the company can both grow its earnings and increase the percentage of earnings that it pays out, essentially multiplying the dividend.

Many investors will assess a company's dividend performance by evaluating how much the dividend payments have changed over time. Emaar Properties PJSC has delivered 21% dividend growth per year on average over the past 10 years. It's exciting to see that both earnings and dividends per share have grown rapidly over the past few years.

The Bottom Line

Is Emaar Properties PJSC an attractive dividend stock, or better left on the shelf? It's great that Emaar Properties PJSC is growing earnings per share while simultaneously paying out a low percentage of both its earnings and cash flow. It's disappointing to see the dividend has been cut at least once in the past, but as things stand now, the low payout ratio suggests a conservative approach to dividends, which we like. Emaar Properties PJSC looks solid on this analysis overall, and we'd definitely consider investigating it more closely.

While it's tempting to invest in Emaar Properties PJSC for the dividends alone, you should always be mindful of the risks involved. To help with this, we've discovered 1 warning sign for Emaar Properties PJSC that you should be aware of before investing in their shares.

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

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