Nasdaq
华尔街日报Should You Buy AntarChile S.A. (SNSE:ANTARCHILE) For Its Upcoming Dividend?
AntarChile S.A. (SNSE:ANTARCHILE) stock is about to trade ex-dividend in 3 days. The ex-dividend date is commonly two business days before the record date, which is the cut-off date for shareholders to be present on the company's books to be eligible for a dividend payment. The ex-dividend date is of consequence because whenever a stock is bought or sold, the trade can take two business days or more to settle. This means that investors who purchase AntarChile's shares on or after the 15th of December will not receive the dividend, which will be paid on the 19th of December.
The company's next dividend payment will be US$0.123 per share. Last year, in total, the company distributed US$0.41 to shareholders. Calculating the last year's worth of payments shows that AntarChile has a trailing yield of 4.8% on the current share price of CL$7879.50. If you buy this business for its dividend, you should have an idea of whether AntarChile's dividend is reliable and sustainable. We need to see whether the dividend is covered by earnings and if it's growing.
If a company pays out more in dividends than it earned, then the dividend might become unsustainable - hardly an ideal situation. That's why it's good to see AntarChile paying out a modest 37% of its earnings. AntarChile paid a dividend despite reporting negative free cash flow last year. That's typically a bad combination and - if this were more than a one-off - not sustainable.
Check out our latest analysis for AntarChile
Click here to see how much of its profit AntarChile 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. Investors love dividends, so if earnings fall and the dividend is reduced, expect a stock to be sold off heavily at the same time. That's why it's comforting to see AntarChile's earnings have been skyrocketing, up 32% per annum for the past five years.
Many investors will assess a company's dividend performance by evaluating how much the dividend payments have changed over time. AntarChile's dividend payments are effectively flat on where they were 10 years ago.
To Sum It Up
Is AntarChile worth buying for its dividend? Typically, companies that are growing rapidly and paying out a low fraction of earnings are keeping the profits for reinvestment in the business. This strategy can add significant value to shareholders over the long term - as long as it's done without issuing too many new shares. AntarChile ticks a lot of boxes for us from a dividend perspective, and we think these characteristics should mark the company as deserving of further attention.
While it's tempting to invest in AntarChile for the dividends alone, you should always be mindful of the risks involved. For example, AntarChile has 2 warning signs (and 1 which shouldn't be ignored) we think you should know about.
Generally, we wouldn't recommend just buying the first dividend stock you see. Here's a curated list of interesting stocks that are strong dividend payers.
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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.