Some investors rely on dividends for growing their wealth, and if you’re one of those dividend sleuths, you might be intrigued to know that Cohen & Steers, Inc. (NYSE:CNS) is about to go ex-dividend in just 3 days. 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. Thus, you can purchase Cohen & Steers’ shares before the 10th of May in order to receive the dividend, which the company will pay on the 23rd of May.
The company’s next dividend payment will be US$0.59 per share. Last year, in total, the company distributed US$2.36 to shareholders. Based on the last year’s worth of payments, Cohen & Steers stock has a trailing yield of around 3.3% on the current share price of US$70.57. If you buy this business for its dividend, you should have an idea of whether Cohen & Steers’s dividend is reliable and sustainable. As a result, readers should always check whether Cohen & Steers has been able to grow its dividends, or if the dividend might be cut.
See our latest analysis for Cohen & Steers
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. Its dividend payout ratio is 89% of profit, which means the company is paying out a majority of its earnings. The relatively limited profit reinvestment could slow the rate of future earnings growth. We’d be worried about the risk of a drop in earnings.
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.
Click here to see the company’s payout ratio, plus analyst estimates of its future dividends.
Have Earnings And Dividends Been Growing?
Stocks with flat earnings can still be attractive dividend payers, but it is important to be more conservative with your approach and demand a greater margin for safety when it comes to dividend sustainability. If business enters a downturn and the dividend is cut, the company could see its value fall precipitously. It’s not encouraging to see that Cohen & Steers’s earnings are effectively flat over the past five years. We’d take that over an earnings decline any day, but in the long run, the best dividend stocks all grow their earnings per share.
Many investors will assess a company’s dividend performance by evaluating how much the dividend payments have changed over time. Cohen & Steers’s dividend payments are effectively flat on where they were 10 years ago.
To Sum It Up
From a dividend perspective, should investors buy or avoid Cohen & Steers? Cohen & Steers’s earnings are effectively flat over recent years, even as the company pays out more than half of its earnings to shareholders as dividends. It might be worth researching if the company is reinvesting in growth projects that could grow earnings and dividends in the future, but for now we’re on the fence about its dividend prospects.
So if you want to do more digging on Cohen & Steers, you’ll find it worthwhile knowing the risks that this stock faces. For example, we’ve found 3 warning signs for Cohen & Steers that we recommend you consider before investing in the business.
Generally, we wouldn’t recommend just buying the first dividend stock you see. Here’s a curated list of interesting stocks that are strong dividend payers.
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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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