Cielo-Blu Group Ltd (TLV:CILO) Goes Ex-Dividend Soon
Regular readers will know that we love our dividends at Simply Wall St, which is why it's exciting to see Cielo-Blu Group Ltd (TLV:CILO) is about to trade ex-dividend in the next four days. The ex-dividend date is two business days before a company's record date in most cases, which is the date on which the company determines which shareholders are entitled to receive a dividend. It is important to be aware of the ex-dividend date because any trade on the stock needs to have been settled on or before the record date. Accordingly, Cielo-Blu Group investors that purchase the stock on or after the 10th of September will not receive the dividend, which will be paid on the 24th of September.
The company's next dividend payment will be ₪0.0598041 per share. Last year, in total, the company distributed ₪0.12 to shareholders. Based on the last year's worth of payments, Cielo-Blu Group stock has a trailing yield of around 3.7% on the current share price of ₪3.277. Dividends are an important source of income to many shareholders, but the health of the business is crucial to maintaining those dividends. So we need to investigate whether Cielo-Blu Group can afford its dividend, and if the dividend could grow.
If a company pays out more in dividends than it earned, then the dividend might become unsustainable - hardly an ideal situation. Cielo-Blu Group has a low and conservative payout ratio of just 6.5% of its income after tax.
View our latest analysis for Cielo-Blu Group
Click here to see how much of its profit Cielo-Blu Group paid out over the last 12 months.
Have Earnings And Dividends Been Growing?
Businesses with shrinking earnings are tricky from a dividend perspective. If earnings fall far enough, the company could be forced to cut its dividend. Cielo-Blu Group's earnings have collapsed faster than Wile E Coyote's schemes to trap the Road Runner; down a tremendous 38% a year over the past five years.
We'd also point out that Cielo-Blu Group issued a meaningful number of new shares in the past year. It's hard to grow dividends per share when a company keeps creating new shares.
The main way most investors will assess a company's dividend prospects is by checking the historical rate of dividend growth. Cielo-Blu Group's dividend payments per share have declined at 19% per year on average over the past nine years, which is uninspiring. 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
From a dividend perspective, should investors buy or avoid Cielo-Blu Group? Earnings per share have shrunk noticeably in recent years, although we like that the company has a low payout ratio. This could suggest a cut to the dividend may not be a major risk in the near future. We think this is a pretty attractive combination, and would be interested in investigating Cielo-Blu Group more closely.
On that note, you'll want to research what risks Cielo-Blu Group is facing. For example, we've found 6 warning signs for Cielo-Blu Group (2 shouldn't be ignored!) that deserve your attention before investing in the shares.
If you're in the market for strong dividend payers, we recommend checking our selection of top 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.