Four Days Left To Buy Pine Cliff Energy Ltd. (TSE:PNE) Before The Ex-Dividend Date
Regular readers will know that we love our dividends at Simply Wall St, which is why it's exciting to see Pine Cliff Energy Ltd. (TSE:PNE) is about to trade ex-dividend in the next 4 days. The ex-dividend date is one business day 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 important as the process of settlement involves two full business days. So if you miss that date, you would not show up on the company's books on the record date. Thus, you can purchase Pine Cliff Energy's shares before the 14th of August in order to receive the dividend, which the company will pay on the 31st of August.
The company's next dividend payment will be CA$0.011 per share, and in the last 12 months, the company paid a total of CA$0.13 per share. Based on the last year's worth of payments, Pine Cliff Energy stock has a trailing yield of around 9.0% on the current share price of CA$1.45. If you buy this business for its dividend, you should have an idea of whether Pine Cliff Energy's dividend is reliable and sustainable. As a result, readers should always check whether Pine Cliff Energy has been able to grow its dividends, or if the dividend might be cut.
View our latest analysis for Pine Cliff Energy
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. Last year Pine Cliff Energy paid out 91% of its profits as dividends to shareholders, suggesting the dividend is not well covered by earnings. Yet cash flow is typically more important than profit for assessing dividend sustainability, so we should always check if the company generated enough cash to afford its dividend. It paid out more than half (56%) of its free cash flow in the past year, which is within an average range for most companies.
It's good to see that while Pine Cliff Energy's dividends were not well covered by profits, at least they are affordable from a cash perspective. Still, if the company continues paying out such a high percentage of its profits, the dividend could be at risk if business turns sour.
Click here to see how much of its profit Pine Cliff Energy paid out over the last 12 months.
Have Earnings And Dividends Been Growing?
Companies with consistently growing earnings per share generally make the best dividend stocks, as they usually find it easier to grow dividends per share. 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 Pine Cliff Energy's earnings have been skyrocketing, up 64% per annum for the past five years.
Given that Pine Cliff Energy has only been paying a dividend for a year, there's not much of a past history to draw insight from.
Final Takeaway
Should investors buy Pine Cliff Energy for the upcoming dividend? Growing earnings per share and a normal cashflow payout ratio is an ok combination, but we're concerned that the company is paying out such a high percentage of its income as dividends. To summarise, Pine Cliff Energy looks okay on this analysis, although it doesn't appear a stand-out opportunity.
If you want to look further into Pine Cliff Energy, it's worth knowing the risks this business faces. Our analysis shows 3 warning signs for Pine Cliff Energy and you should be aware of them before buying any 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.
