Yahoo Finance Income Investors Should Know That Crane NXT, Co. (NYSE:CXT) Goes Ex-Dividend Soon
Readers hoping to buy Crane NXT, Co. (NYSE:CXT) for its dividend will need to make their move shortly, as the stock is about to trade ex-dividend. 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 because any transaction on a stock needs to have been settled before the record date in order to be eligible for a dividend. Meaning, you will need to purchase Crane NXT's shares before the 31st of May to receive the dividend, which will be paid on the 12th of June.
The company's next dividend payment will be US$0.16 per share. Last year, in total, the company distributed US$0.64 to shareholders. Based on the last year's worth of payments, Crane NXT has a trailing yield of 1.0% on the current stock price of US$61.58. 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 Crane NXT has been able to grow its dividends, or if the dividend might be cut.
See our latest analysis for Crane NXT
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. Crane NXT has a low and conservative payout ratio of just 18% of its income after tax. A useful secondary check can be to evaluate whether Crane NXT generated enough free cash flow to afford its dividend. What's good is that dividends were well covered by free cash flow, with the company paying out 16% of its cash flow last year.
It's encouraging to see that the dividend is covered by both profit and cash flow. This generally suggests the dividend is sustainable, as long as earnings don't drop precipitously.
Click here to see the company's payout ratio, plus analyst estimates of its future dividends.
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. From this viewpoint, it's unfortunate that earnings per share have declined 8.8% over the last year.
Unfortunately Crane NXT has only been paying a dividend for a year or so, so there's not much of a history to draw insight from.
The Bottom Line
Has Crane NXT got what it takes to maintain its dividend payments? Crane NXT has comfortably low cash and profit payout ratios, which may mean the dividend is sustainable even in the face of a sharp decline in earnings per share. Still, we consider declining earnings to be a warning sign. All things considered, we are not particularly enthused about Crane NXT from a dividend perspective.
So while Crane NXT looks good from a dividend perspective, it's always worthwhile being up to date with the risks involved in this stock. For example, we've found 1 warning sign for Crane NXT that we recommend you consider before investing in the business.
A common investing mistake is buying the first interesting stock you see. Here you can find a full list of high-yield 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.
