The share of Inversiones Tricahue SA (SNSE: TRICAHUE) becomes ex-dividend in just three days

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It looks like Inversiones Tricahue SA (SNSE: TRICAHUE) is about to be ex-dividend in the next 3 days. The ex-dividend date is one working day before the registration date, which is the deadline by which shareholders must be present on the books of the company to be eligible for a dividend payment. The ex-dividend date is important because every time a stock is bought or sold, the transaction takes at least two business days to settle. Thus, you can buy the shares of Inversiones Tricahue before October 20 in order to receive the dividend that the company will pay on October 25.

The upcoming dividend of the company is CL $ 25.60 per share, following the last 12 months when the company distributed a total of CL $ 46.70 per share to shareholders. Last year’s total dividend payouts show that Inversiones Tricahue has a rolling 6.2% return on the current CLP750 share price. Dividends are a major contributor to returns on investment for long-term holders, but only if the dividend continues to be paid. That is why we should always check whether dividend payments seem sustainable and whether the business is growing.

See our latest review for Inversiones Tricahue

If a company pays more dividends than it has earned, then the dividend could become unsustainable – which is not an ideal situation. That’s why it’s good to see Inversiones Tricahue donate a modest 29% of its profits.

Companies that pay less dividends than they earn profits generally have more sustainable dividends. The lower the payout ratio, the more leeway the company has before being forced to reduce the dividend.

Click here to see how much of its profits Inversiones Tricahue has paid in the last 12 months.

Historic SNSE dividend: TRICAHUE October 16, 2021

Have profits and dividends increased?

Companies with declining profits are tricky from a dividend perspective. If profits fall and the company is forced to cut its dividend, investors could see the value of their investment go up in smoke. With that in mind, we are hampered by the 9.4% per year drop in profits of Inversiones Tricahue over the past five years. Such a sudden drop casts doubt on the future sustainability of the dividend.

Another key way to measure a company’s dividend outlook is to measure its historical rate of dividend growth. The dividend payouts per share of Inversiones Tricahue have declined by 10% per year on average over the past 10 years, which is not inspiring. It’s never nice to watch profits and dividends go down, but at least management has reduced the dividend rather than potentially risking the health of the company in an attempt to maintain it.

To summarize

Is Inversiones Tricahue an attractive dividend stock, or rather left on the back burner? Inversiones Tricahue’s earnings per share have been declining over the past five years, although it has the cushion of a low payout ratio, which suggests that a dividend cut is relatively unlikely. We are not convinced of the merits of the company and believe that there could be better opportunities there.

So if you want to dig deeper into Inversiones Tricahue, you will find it worth knowing the risks that this title faces. Note that Inversiones Tricahue shows 4 warning signs in our investment analysis, and 1 of them is potentially serious …

However, we don’t recommend simply buying the first dividend stock you see. Here is a list of interesting dividend paying stocks with a yield above 2% and a dividend coming soon.

This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts using only unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell shares and does not take into account your goals or your financial situation. Our aim is to bring you long-term, targeted analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price sensitive companies or qualitative material. Simply Wall St has no position in any of the stocks mentioned.

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