Nasdaq
華爾街日報Cgs Holdings Inc. (TSE:6633) Stock Goes Ex-Dividend In Just Three Days
Cgs Holdings Inc. (TSE:6633) stock is about to trade ex-dividend in three days. 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 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 Cgs Holdings' shares before the 29th of December to receive the dividend, which will be paid on the 10th of March.
The company's next dividend payment will be JP¥10.00 per share, and in the last 12 months, the company paid a total of JP¥10.00 per share. Looking at the last 12 months of distributions, Cgs Holdings has a trailing yield of approximately 2.6% on its current stock price of JP¥380.00. If you buy this business for its dividend, you should have an idea of whether Cgs Holdings's dividend is reliable and sustainable. As a result, readers should always check whether Cgs Holdings has been able to grow its dividends, or if the dividend might be cut.
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. That's why it's good to see Cgs Holdings paying out a modest 35% of its earnings. 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 paid out 96% of its free cash flow in the form of dividends last year, which is outside the comfort zone for most businesses. Cash flows are usually much more volatile than earnings, so this could be a temporary effect - but we'd generally want to look more closely here.
While Cgs Holdings's dividends were covered by the company's reported profits, cash is somewhat more important, so it's not great to see that the company didn't generate enough cash to pay its dividend. Cash is king, as they say, and were Cgs Holdings to repeatedly pay dividends that aren't well covered by cashflow, we would consider this a warning sign.
View our latest analysis for Cgs Holdings
Click here to see how much of its profit Cgs Holdings paid out over the last 12 months.
Have Earnings And Dividends Been Growing?
Stocks in companies that generate sustainable earnings growth often make the best dividend prospects, as it is easier to lift the dividend when earnings are rising. If business enters a downturn and the dividend is cut, the company could see its value fall precipitously. This is why it's a relief to see Cgs Holdings earnings per share are up 8.8% per annum over the last five years. Earnings have been growing at a steady rate, but we're concerned dividend payments consumed most of the company's cash flow over the past year.
Another key way to measure a company's dividend prospects is by measuring its historical rate of dividend growth. Cgs Holdings has delivered an average of 3.6% per year annual increase in its dividend, based on the past 10 years of dividend payments. We're glad to see dividends rising alongside earnings over a number of years, which may be a sign the company intends to share the growth with shareholders.
To Sum It Up
From a dividend perspective, should investors buy or avoid Cgs Holdings? Cgs Holdings delivered reasonable earnings per share growth in recent times, and paid out less than half its profits and 96% of its cash flow over the last year, which is a mediocre outcome. Overall, it's hard to get excited about Cgs Holdings from a dividend perspective.
However if you're still interested in Cgs Holdings as a potential investment, you should definitely consider some of the risks involved with Cgs Holdings. For example, we've found 3 warning signs for Cgs Holdings (1 is potentially serious!) 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.