Yahoo Finance We Wouldn't Be Too Quick To Buy Cenkos Securities plc (LON:CNKS) Before It Goes Ex-Dividend
Regular readers will know that we love our dividends at Simply Wall St, which is why it's exciting to see Cenkos Securities plc (LON:CNKS) is about to trade ex-dividend in the next three days. Typically, the ex-dividend date is one business day before the record date which is the date on which a company determines the shareholders eligible to receive a 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. Thus, you can purchase Cenkos Securities' shares before the 25th of May in order to receive the dividend, which the company will pay on the 22nd of June.
The company's next dividend payment will be UK£0.005 per share, and in the last 12 months, the company paid a total of UK£0.015 per share. Based on the last year's worth of payments, Cenkos Securities stock has a trailing yield of around 4.1% on the current share price of £0.37. If you buy this business for its dividend, you should have an idea of whether Cenkos Securities's dividend is reliable and sustainable. So we need to investigate whether Cenkos Securities can afford its dividend, and if the dividend could grow.
Check out our latest analysis for Cenkos Securities
Dividends are usually paid out of company profits, so if a company pays out more than it earned then its dividend is usually at greater risk of being cut. Cenkos Securities reported a loss after tax last year, which means it's paying a dividend despite being unprofitable. While this might be a one-off event, this is unlikely to be sustainable in the long term.
Click here to see how much of its profit Cenkos Securities paid out over the last 12 months.
Have Earnings And Dividends Been Growing?
Businesses with shrinking earnings are tricky from a dividend perspective. If earnings decline and the company is forced to cut its dividend, investors could watch the value of their investment go up in smoke. Cenkos Securities reported a loss last year, and the general trend suggests its earnings have also been declining in recent years, making us wonder if the dividend is at risk.
The main way most investors will assess a company's dividend prospects is by checking the historical rate of dividend growth. Cenkos Securities's dividend payments per share have declined at 15% per year on average over the past 10 years, which is uninspiring. It's never nice to see earnings and dividends falling, but at least management has cut the dividend rather than potentially risk the company's health in an attempt to maintain it.
Get our latest analysis on Cenkos Securities's balance sheet health here.
Final Takeaway
From a dividend perspective, should investors buy or avoid Cenkos Securities? First, it's not great to see the company paying a dividend despite being loss-making over the last year. Worse, the general trend in its earnings looks negative in recent years. This is not an overtly appealing combination of characteristics, and we're just not that interested in this company's dividend.
Although, if you're still interested in Cenkos Securities and want to know more, you'll find it very useful to know what risks this stock faces. To that end, you should learn about the 3 warning signs we've spotted with Cenkos Securities (including 2 which are concerning).
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.
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