Yahoo Finance Douglas Elliman Inc. (NYSE:DOUG) Goes Ex-Dividend Soon
Douglas Elliman Inc. (NYSE:DOUG) is about to trade ex-dividend in the next 4 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 of consequence because whenever a stock is bought or sold, the trade takes at least two business day to settle. Thus, you can purchase Douglas Elliman's shares before the 9th of December in order to receive the dividend, which the company will pay on the 22nd of December.
The company's next dividend payment will be US$0.05 per share. Last year, in total, the company distributed US$0.20 to shareholders. Based on the last year's worth of payments, Douglas Elliman stock has a trailing yield of around 4.8% on the current share price of $4.2. 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 investigate whether Douglas Elliman can afford its dividend, and if the dividend could grow.
See our latest analysis for Douglas Elliman
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. Douglas Elliman paid out a comfortable 36% of its profit last year. Yet cash flows are even more important than profits for assessing a dividend, so we need to see if the company generated enough cash to pay its distribution. Dividends consumed 57% of the company's free cash flow last year, which is within a normal range for most dividend-paying organisations.
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 how much of its profit Douglas Elliman paid out over the last 12 months.
Have Earnings And Dividends Been Growing?
Stocks in companies that generate sustainable earnings growth often make the best dividend prospects, as it is easier to lift the dividend when earnings are rising. Investors love dividends, so if earnings fall and the dividend is reduced, expect a stock to be sold off heavily at the same time. It's encouraging to see Douglas Elliman has grown its earnings rapidly, up 167% a year for the past three years.
Douglas Elliman also issued more than 5% of its market cap in new stock during the past year, which we feel is likely to hurt its dividend prospects in the long run. It's hard to grow dividends per share when a company keeps creating new shares.
Unfortunately Douglas Elliman has only been paying a dividend for a year or so, so there's not much of a history to draw insight from.
To Sum It Up
Is Douglas Elliman worth buying for its dividend? Earnings per share have grown at a nice rate in recent times and over the last year, Douglas Elliman paid out less than half its earnings and a bit over half its free cash flow. There's a lot to like about Douglas Elliman, and we would prioritise taking a closer look at it.
In light of that, while Douglas Elliman has an appealing dividend, it's worth knowing the risks involved with this stock. Our analysis shows 2 warning signs for Douglas Elliman and you should be aware of these before buying any shares.
If you're in the market for strong dividend payers, we recommend checking our selection of top dividend stocks.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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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