Yahoo Finance Just Four Days Till Molson Coors Beverage Company (NYSE:TAP) Will Be Trading Ex-Dividend
It looks like Molson Coors Beverage Company (NYSE:TAP) is about to go ex-dividend in the next four days. The ex-dividend date occurs one day before the record date which is the day on which shareholders need to be on the company's books in order to receive a dividend. It is important to be aware of the ex-dividend date because any trade on the stock needs to have been settled on or before the record date. This means that investors who purchase Molson Coors Beverage's shares on or after the 1st of December will not receive the dividend, which will be paid on the 15th of December.
The company's next dividend payment will be US$0.38 per share, and in the last 12 months, the company paid a total of US$1.52 per share. Based on the last year's worth of payments, Molson Coors Beverage stock has a trailing yield of around 2.7% on the current share price of $55.58. 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.
See our latest analysis for Molson Coors Beverage
If a company pays out more in dividends than it earned, then the dividend might become unsustainable - hardly an ideal situation. Molson Coors Beverage is paying out an acceptable 65% of its profit, a common payout level among most companies. That said, even highly profitable companies sometimes might not generate enough cash to pay the dividend, which is why we should always check if the dividend is covered by cash flow. Thankfully its dividend payments took up just 44% of the free cash flow it generated, which is a comfortable payout ratio.
It's positive to see that Molson Coors Beverage'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.
Have Earnings And Dividends Been Growing?
Businesses with shrinking earnings are tricky from a dividend perspective. Investors love dividends, so if earnings fall and the dividend is reduced, expect a stock to be sold off heavily at the same time. Readers will understand then, why we're concerned to see Molson Coors Beverage's earnings per share have dropped 21% a year over the past five years. When earnings per share fall, the maximum amount of dividends that can be paid also falls.
Another key way to measure a company's dividend prospects is by measuring its historical rate of dividend growth. In the past 10 years, Molson Coors Beverage has increased its dividend at approximately 1.7% a year on average.
To Sum It Up
Is Molson Coors Beverage an attractive dividend stock, or better left on the shelf? We're not enthused by the declining earnings per share, although at least the company's payout ratio is within a reasonable range, meaning it may not be at imminent risk of a dividend cut. To summarise, Molson Coors Beverage looks okay on this analysis, although it doesn't appear a stand-out opportunity.
However if you're still interested in Molson Coors Beverage as a potential investment, you should definitely consider some of the risks involved with Molson Coors Beverage. For example, we've found 2 warning signs for Molson Coors Beverage that we recommend you consider before investing in the business.
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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