Regular readers will know that we love our dividends on Simply Wall Street, which is why it is exciting to see Crane Co. (NYSE: CR) will trade ex-dividend for the next four days. The ex-dividend day is one business day before the cut-off date. This is the date on which shareholders must appear on the company’s books in order to receive a dividend payment. The ex-dividend date is important because any transaction in a stock must be completed before the cut-off date in order to receive a dividend. Therefore, if you buy Cranes stock on or after May 27th, you will not be eligible for the dividend if it is paid on June 9th.
The company’s next dividend payment is $ 0.43 per share. For the past 12 months, the company paid a total of $ 1.72 per share. Calculating last year’s payment value shows that Crane has a trailing yield of 1.8% versus its current share price of $ 94.31. We love when companies pay a dividend, but it’s also important to make sure that laying the golden eggs doesn’t kill our golden goose! As such, readers should always check to see if Crane has been able to increase its dividends or if the dividend may be lowered.
Check out our latest analysis for Cranes
When a company pays more dividends than it earns, the dividend can become unsustainable – hardly an ideal situation. So it’s good to see Crane paying out a modest 44% of his income. However, cash flows are even more important than profits in assessing a dividend. Hence, we need to check that the company has generated enough cash to pay its dividend. Thankfully, dividend payments only made up 27% of the free cash flow it generated, which is a comfortable payout ratio.
It is positive to see that Crane’s dividend is covered by both earnings and cash flow, as 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 is shortened.
Click here to view the company’s payout ratio and analyst estimates of future dividends.
NYSE: CR Historic Dividend May 22, 2021
Have profits and dividends grown?
Equally profitable stocks can still be attractive dividend payers, but it’s important to be more conservative with your approach and demand a larger margin of safety when it comes to dividend sustainability. Investors love dividends. So if earnings are going down and dividends are going down, expect a stock to sell heavily at the same time. With that in mind, we’re not thrilled that Crane earnings per share have been virtually unchanged over the past five years. Sure, better than watching them fall off a cliff, but the best dividend stocks add significant gains to their profits over the long term.
Many investors rate a company’s dividend performance by rating how much dividend payments have changed over time. For the past 10 years, Crane has increased its dividend an average of 6.5% per year.
Final takeaway
Does Crane have what it takes to keep dividend payments going? Earnings per share were flat, even though the company pays out at least a small and conservative percentage of both earnings and cash flow. It’s definitely not great to see profits fall, but at least there can be a buffer before the dividend is cut. Overall, we’re not very bearish on the stock, but there are probably better dividend investments out there.
With that in mind, you’d like to investigate the risks Crane is facing. Every business has risks and we have discovered 1 warning sign for cranes You should know it.
A common investment mistake is buying the first interesting stock you see. Here is a list of promising dividend stocks with a yield greater than 2% and an upcoming dividend.
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This article from Simply Wall St is of a general nature. It is not a recommendation to buy or sell stocks and does not take into account your goals or your financial situation. We want to provide you with a long-term, focused analysis based on fundamental data. Note that our analysis may not take into account the latest price sensitive company announcements or quality materials. Simply Wall St has no position in the stocks mentioned.
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