Income Investors Should Know That Pine Cliff Energy Ltd. (TSE:PNE) Goes Ex-Dividend Soon
Readers hoping to buy Pine Cliff Energy Ltd. (TSE:PNE) for its dividend will need to make their move shortly, as the stock is about to trade ex-dividend. The ex-dividend date is usually set to be one business day before the record date which is the cut-off date on which you must be present on the company's books as a shareholder in order to receive the dividend. 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. Meaning, you will need to purchase Pine Cliff Energy's shares before the 14th of November to receive the dividend, which will be paid on the 30th of November.
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. Looking at the last 12 months of distributions, Pine Cliff Energy has a trailing yield of approximately 8.4% on its current stock price of CA$1.54. 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! So we need to check whether the dividend payments are covered, and if earnings are growing.
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. Pine Cliff Energy paid out 91% of its earnings, which is more than we're comfortable with, unless there are mitigating circumstances. That said, even highly profitable companies sometimes might not generate enough cash to pay the dividend, which is why we should always check if the dividend is covered by cash flow. Dividends consumed 56% of the company's free cash flow last year, which is within a normal range for most dividend-paying organisations.
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. Investors love dividends, so if earnings fall and the dividend is reduced, expect a stock to be sold off heavily at the same time. 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.
Unfortunately Pine Cliff Energy has only been paying a dividend for a year or so, so there's not much of a history to draw insight from.
Final Takeaway
Is Pine Cliff Energy an attractive dividend stock, or better left on the shelf? Pine Cliff Energy has been growing its earnings per share nicely, although judging by the difference between its profit and cashflow payout ratios, the company might have reported some write-offs over the last year. Overall, it's hard to get excited about Pine Cliff Energy from a dividend perspective.
So if you want to do more digging on Pine Cliff Energy, you'll find it worthwhile knowing the risks that this stock faces. For example, we've found 2 warning signs for Pine Cliff Energy that we recommend you consider before investing in the business.
Generally, we wouldn't recommend just buying the first dividend stock you see. Here's a curated list of interesting stocks that are strong dividend payers.
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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.
