Only four days left to cash the group of characters dividend (LON: CCT)
Regular readers will know we love our dividends at Simply Wall St, which is why it’s exciting to see The plc character group (LON: CCT) is set to trade ex-dividend within the next four days. The ex-dividend date is one working day before the registration date, which is the deadline by which shareholders must be present on the books of the company to be eligible for a dividend payment. It is important to know the ex-dividend date, as any transaction in the share must have been settled by the registration date at the latest. In other words, investors can buy Character Group shares before July 15 in order to be eligible for the dividend, which will be paid on July 30.
The upcoming dividend for Character Group is Â£ 0.06 per share, up from the total dividend per share of Â£ 0.05 last year. If you are buying this company for its dividend, you should know if Character Group’s dividend is reliable and sustainable. As a result, readers should always check whether Character Group has been able to increase its dividends or if the dividend could be reduced.
See our latest analysis for Character Group
Dividends are usually paid out of the company’s profits, so if a company pays more than it earned, its dividend is usually at risk of being reduced. Character Group paid a comfortable 26% of its profit last year. Having said that, even very profitable companies can sometimes not generate enough cash to pay the dividend, which is why we always need to check if the dividend is covered by the cash flow. The good news is that she only paid 6.9% of her free cash flow last year.
It is positive to see that Character Group’s dividend is covered by both earnings and cash flow, as this is usually a sign that the dividend is sustainable, and a lower payout ratio usually suggests a larger margin. security before the dividend is cut.
Click here to view the company’s payout ratio, as well as analysts’ estimates of its future dividends.
Have profits and dividends increased?
When profits fall, dividend companies become much more difficult to analyze and to safely own. If profits fall and the company is forced to cut its dividend, investors could see the value of their investment go up in smoke. With that in mind, we are hampered by Character Group’s revenue decline of 6.4% per year over the past five years. When earnings per share decrease, the maximum amount of dividends that can be paid also decreases.
Most investors primarily assess a company’s dividend prospects by checking the historical rate of dividend growth. Over the past 10 years, Character Group has increased its dividend to around 8.4% per year on average.
The bottom line
Should investors buy Character Group for the next dividend? Earnings per share are down significantly, although at least the company pays a small and conservative percentage of its earnings and cash flow. It’s certainly not great to see profits plummet, but at least there may be some buffer before the dividend has to be cut. In summary, while it has some positive characteristics, we are not inclined to rush out and buy Character Group today.
While it is tempting to invest in Character Group purely for dividends, you should always be aware of the risks involved. Every business has risks, and we have spotted 2 warning signs for the character group you should know.
However, we don’t recommend simply buying the first dividend stock you see. Here is a list of interesting dividend paying stocks with a yield above 2% and a dividend coming soon.
This Simply Wall St article is general in nature. It does not constitute a recommendation to buy or sell any stock and does not take into account your goals or your financial situation. Our aim is to bring you long-term, targeted analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price sensitive companies or qualitative documents. Simply Wall St has no position in the mentioned stocks.
Do you have any feedback on this item? Are you worried about the content? Get in touch with us directly. You can also send an email to the editorial team (at) simplywallst.com.