Is It Smart To Buy JHSF Participações S.A. (BVMF:JHSF3) Before It Goes Ex-Dividend?
Readers hoping to buy JHSF Participações S.A. (BVMF:JHSF3) for its dividend will need to make their move shortly, as the stock is about to trade ex-dividend. 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. In other words, investors can purchase JHSF Participações' shares before the 29th of October in order to be eligible for the dividend, which will be paid on the 9th of November.
The company's next dividend payment will be R$0.0685438 per share. Last year, in total, the company distributed R$0.37 to shareholders. Looking at the last 12 months of distributions, JHSF Participações has a trailing yield of approximately 2.7% on its current stock price of R$13.89. We love seeing companies pay a dividend, but it's also important to be sure that laying the golden eggs isn't going to kill our golden goose! As a result, readers should always check whether JHSF Participações 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. JHSF Participações has a low and conservative payout ratio of just 4.9% of its income after tax. A useful secondary check can be to evaluate whether JHSF Participações generated enough free cash flow to afford its dividend. Luckily it paid out just 14% of its free cash flow last year.
It's encouraging to see that the dividend is covered by both profit and cash flow. This generally suggests the dividend is sustainable, as long as earnings don't drop precipitously.
Check out our latest analysis for JHSF Participações
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 business enters a downturn and the dividend is cut, the company could see its value fall precipitously. That's why it's comforting to see JHSF Participações's earnings have been skyrocketing, up 27% per annum for the past five years. JHSF Participações earnings per share have been sprinting ahead like the Road Runner at a track and field day; scarcely stopping even for a cheeky "beep-beep". We also like that it is reinvesting most of its profits in its business.'
Many investors will assess a company's dividend performance by evaluating how much the dividend payments have changed over time. JHSF Participações's dividend payments are broadly unchanged compared to where they were five years ago.
The Bottom Line
Is JHSF Participações an attractive dividend stock, or better left on the shelf? JHSF Participações has grown its earnings per share while simultaneously reinvesting in the business. Unfortunately it's cut the dividend at least once in the past five years, but the conservative payout ratio makes the current dividend look sustainable. There's a lot to like about JHSF Participações, and we would prioritise taking a closer look at it.
While it's tempting to invest in JHSF Participações for the dividends alone, you should always be mindful of the risks involved. For instance, we've identified 2 warning signs for JHSF Participações (1 makes us a bit uncomfortable) you should be aware of.
If you're in the market for strong dividend payers, we recommend checking our selection of top dividend stocks.
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