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looks like Chemtrade Logistics Income Fund (TSE:CHE.UN) is going ex-dividend within the next 3 days. The ex-dividend date is one business day before the company’s record date, which is the date on which the company determines which shareholders are entitled to receive the dividend. It is important to note the ex-dividend date, as trades in the stock must be settled on or before the record date. Therefore, Chemtrade Logistics Income Fund investors who purchased shares after January 30th will not receive the dividend, which will be paid to him on February 26th.
The company’s next dividend payment will be CA$0.055 per share, and in the last 12 months, the company paid a total of CA$0.60 per share. Looking at the last 12 months of distributions, Chemtrade Logistics Income Fund has a yield of approximately 6.6% on the current share price of CA$9.11. Dividends can be a significant contributor to investment returns for long-term holders, but only if they continue to be paid. That’s why we should always check whether the dividend payments are sustainable, and if the company is growing.
Check out our latest analysis for Chemtrade Logistics Income Fund.
If a company pays out more in dividends than it earned in profit, then the dividend might become unsustainable – hardly an ideal situation. Fortunately, Chemtrade Logistics Income Fund’s payout ratio is modest, at just 31% of its profits. That said, even highly profitable companies might not generate enough cash to pay the dividend, so we should always check if the dividend is covered by cash flow. The good news is that the company paid out just 22% of its free cash flow last year.
It’s reassuring 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.
Click here to see the company’s payout ratio and analyst estimates of its future dividends.
Are profits and dividends growing?
Companies with consistently growing earnings per share usually make the best dividend stocks, as it is easier to grow dividends per share. If profits decline significantly, the company may be forced to cut its dividend. Fortunately for our readers, Chemtrade Logistics Income Fund’s earnings per share have continued to grow at 17% per year over the past five years. Earnings per share are growing rapidly, and the company keeps more than half of its profits within the business. This attractive combination could suggest that the company is focused on reinvesting to further grow its earnings. Fast-growing companies that reinvest heavily are attractive from a dividend perspective, especially since they can increase payout ratios later on.
The main way most investors assess a company’s dividend prospects is by looking at its historical dividend growth rate. Chemtrade Logistics Income Fund’s dividends per share have declined at an average annual rate of 6.7% over the past decade, which is no surprise. It is unusual for earnings per share to increase while dividends per share have decreased. We hope this is because the company is reinvesting heavily into the business, but it could also be a sign that the business is unstable.
conclusion
Is Chemtrade Logistics Income Fund an attractive dividend stock, or should it be left on the shelf? Chemtrade Logistics Income Fund has grown his earnings per share while reinvesting in the business. Unfortunately, the dividend has been cut at least once in the past decade, but the conservative payout ratio makes the current dividend look sustainable. This is a promising combination and shows that this company deserves more attention.
With that in mind, the key to thorough stock research is to be aware of the risks currently facing a stock.Every company has risks, and we found that 3 warning signs for Chemtrade Logistics Income Fund (One of them is a concern!) You should know.
Generally speaking, we don’t recommend just buying the first dividend stock you see.Here it is A carefully selected list of interesting stocks with high dividends.
Have feedback on this article? Curious about its content? contact Please contact us directly. Alternatively, email our editorial team at Simplywallst.com.
This article by Simply Wall St is general in nature. We provide commentary using only unbiased methodologies, based on historical data and analyst forecasts, and articles are not intended to be financial advice. This is not a recommendation to buy or sell any stock, and does not take into account your objectives or financial situation. We aim to provide long-term, focused analysis based on fundamental data. Note that our analysis may not factor in the latest announcements or qualitative material from price-sensitive companies. Simply Wall St has no position in any stocks mentioned.
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