Regular readers will know we love our dividends at Simply Wall St, which is why it’s exciting to see Crane Co. (NYSE: CR) is set to trade ex-dividend within the next four days. The ex-dividend date is one business day before the registration date, which is the deadline for shareholders to be on the books of the company to be eligible for a dividend payment. The ex-dividend date is important because any share transaction must have been settled before the registration date to be eligible for a dividend. Therefore, if you buy Crane shares on or after May 27, you will not be eligible to receive the dividend, when it is paid on June 9.
The company’s next dividend will be $ 0.43 per share, and over the past 12 months, the company has paid a total of $ 1.72 per share. Calculating the value of last year’s payouts shows that Crane has a final return of 1.8% on the current share price of $ 94.31. We love to see companies pay a dividend, but it’s also important to make sure that laying the golden eggs doesn’t kill our golden goose! Accordingly, readers should always check to see if Crane was able to increase its dividends or if the dividend could be reduced.
Discover our latest analyzes for Crane
If a company pays more in dividends than it has earned, then the dividend can become unsustainable – hardly an ideal situation. That’s why it’s good to see Crane donate a modest 44% of his profits. Yet cash flow is still more important than earnings in valuing a dividend, so we need to see if the company has generated enough cash to pay for its distribution. Fortunately, his dividend payments only represented 27% of the free cash flow he generated, which is a comfortable payout ratio.
It is positive to see that Crane’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 reduced.
Click here to view the company’s payout ratio, as well as analysts’ estimates of its future dividends.
Have profits and dividends increased?
Stocks with stable earnings can still be attractive dividend payers, but it’s important to be more careful in your approach and demand a greater margin of safety when it comes to dividend sustainability. Investors love dividends, so if earnings fall and the dividend is reduced, expect a stock to sell heavily at the same time. With that in mind, we’re not thrilled to see that Crane’s earnings per share have remained stable over the past five years. Better than seeing them fall off a cliff, of course, but the best dividend-paying stocks increase their earnings significantly over the long term.
Many investors will assess a company’s dividend yield by evaluating how much dividend payments have changed over time. Over the past 10 years, Crane has increased its dividend by around 6.5% per year on average.
Does Crane have what it takes to maintain its dividend payouts? Earnings per share have remained stable, even though at least the company is paying a conservative small percentage of its earnings and cash flow. It’s certainly not great to see the profits go down, but at least there can be a buffer before the dividend is reduced. Overall, we are not extremely bearish on the stock, but there are probably better dividend investments.
On that note, you’ll want to research the risks Crane faces. Every business has risks, and we have spotted 1 warning sign for Crane you should know.
A common investment mistake is to buy the first interesting stock you see. Here you will find a list of promising dividend paying stocks with a yield above 2% and an upcoming dividend.
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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. We aim 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 information. Simply Wall St has no position in any of the stocks mentioned.
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