U.S. markets closed
  • S&P 500

    3,635.41
    +57.82 (+1.62%)
     
  • Dow 30

    30,046.24
    +454.97 (+1.54%)
     
  • Nasdaq

    12,036.79
    +156.15 (+1.31%)
     
  • Russell 2000

    1,853.53
    +35.23 (+1.94%)
     
  • Crude Oil

    44.83
    -0.08 (-0.18%)
     
  • Gold

    1,804.20
    -0.40 (-0.02%)
     
  • Silver

    23.26
    -0.04 (-0.17%)
     
  • EUR/USD

    1.1901
    +0.0055 (+0.46%)
     
  • 10-Yr Bond

    0.8820
    +0.0250 (+2.92%)
     
  • GBP/USD

    1.3362
    +0.0040 (+0.30%)
     
  • USD/JPY

    104.4900
    +0.0020 (+0.00%)
     
  • BTC-USD

    19,067.40
    +615.43 (+3.34%)
     
  • CMC Crypto 200

    377.31
    +7.56 (+2.04%)
     
  • FTSE 100

    6,432.17
    +98.33 (+1.55%)
     
  • Nikkei 225

    26,165.59
    +638.22 (+2.50%)
     

Only Four Days Left To Cash In On Carriage Services' (NYSE:CSV) Dividend

Simply Wall St
·3 min read

Carriage Services, Inc. (NYSE:CSV) is about to trade ex-dividend in the next four days. This means that investors who purchase shares on or after the 6th of November will not receive the dividend, which will be paid on the 1st of December.

Carriage Services's upcoming dividend is US$0.10 a share, following on from the last 12 months, when the company distributed a total of US$0.35 per share to shareholders. Last year's total dividend payments show that Carriage Services has a trailing yield of 1.4% on the current share price of $25.81. 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! That's why we should always check whether the dividend payments appear sustainable, and if the company is growing.

View our latest analysis for Carriage Services

Dividends are typically paid from company earnings. If a company pays more in dividends than it earned in profit, then the dividend could be unsustainable. Carriage Services paid out 54% of its earnings to investors last year, a normal payout level for most businesses. A useful secondary check can be to evaluate whether Carriage Services generated enough free cash flow to afford its dividend. Luckily it paid out just 9.2% of its free cash flow last year.

It's positive to see that Carriage Services's dividend is covered by both profits and cash flow, since this is generally a sign that the dividend is sustainable, and a lower payout ratio usually suggests a greater margin of safety before the dividend gets cut.

Click here to see the company's payout ratio, plus analyst estimates of its future dividends.

historic-dividend
historic-dividend

Have Earnings And Dividends Been Growing?

When earnings decline, dividend companies become much harder to analyse and own safely. If business enters a downturn and the dividend is cut, the company could see its value fall precipitously. Readers will understand then, why we're concerned to see Carriage Services's earnings per share have dropped 7.3% a year over the past five years. When earnings per share fall, the maximum amount of dividends that can be paid also falls.

The main way most investors will assess a company's dividend prospects is by checking the historical rate of dividend growth. Since the start of our data, nine years ago, Carriage Services has lifted its dividend by approximately 15% a year on average. Growing the dividend payout ratio while earnings are declining can deliver nice returns for a while, but it's always worth checking for when the company can't increase the payout ratio any more - because then the music stops.

Final Takeaway

Is Carriage Services worth buying for its dividend? The payout ratios are within a reasonable range, implying the dividend may be sustainable. Declining earnings are a serious concern, however, and could pose a threat to the dividend in future. All things considered, we are not particularly enthused about Carriage Services from a dividend perspective.

With that being said, if dividends aren't your biggest concern with Carriage Services, you should know about the other risks facing this business. For example, we've found 2 warning signs for Carriage Services (1 is significant!) that deserve your attention before investing in the shares.

If you're in the market for dividend stocks, we recommend checking our list of top dividend stocks with a greater than 2% yield and an upcoming dividend.

This article by Simply Wall St is general in nature. 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com.