Regular readers will know that we love our dividends at Simply Wall St, which is why it's exciting to see Cohen & Steers, Inc. (NYSE:CNS) is about to trade ex-dividend in the next three days. The ex-dividend date is one business day before a company's record date, which is the date on which the company determines which shareholders are entitled to receive a dividend. The ex-dividend date is important because any transaction on a stock needs to have been settled before the record date in order to be eligible for a dividend. Accordingly, Cohen & Steers investors that purchase the stock on or after the 10th of November will not receive the dividend, which will be paid on the 28th of November.
The company's next dividend payment will be US$0.57 per share, on the back of last year when the company paid a total of US$2.28 to shareholders. Based on the last year's worth of payments, Cohen & Steers stock has a trailing yield of around 4.0% on the current share price of $56.69. Dividends are an important source of income to many shareholders, but the health of the business is crucial to maintaining those dividends. As a result, readers should always check whether Cohen & Steers has been able to grow its dividends, or if the dividend might be cut.
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. It paid out 84% of its earnings as dividends last year, which is not unreasonable, but limits reinvestment in the business and leaves the dividend vulnerable to a business downturn. It could become a concern if earnings started to decline.
Companies that pay out less in dividends than they earn in profits generally have more sustainable dividends. The lower the payout ratio, the more wiggle room the business has before it could be forced to cut the dividend.
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 earnings fall far enough, the company could be forced to cut its dividend. With that in mind, we're encouraged by the steady growth at Cohen & Steers, with earnings per share up 6.2% on average over the last five years.
Another key way to measure a company's dividend prospects is by measuring its historical rate of dividend growth. Cohen & Steers's dividend payments are effectively flat on where they were 10 years ago.
The Bottom Line
Has Cohen & Steers got what it takes to maintain its dividend payments? Cohen & Steers has been generating some growth in earnings per share while paying out more than half of its earnings to shareholders in the form of dividends. It doesn't appear an outstanding opportunity, but could be worth a closer look.
So if you want to do more digging on Cohen & Steers, you'll find it worthwhile knowing the risks that this stock faces. Our analysis shows 2 warning signs for Cohen & Steers 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.