Regular readers will know we love our dividends at Simply Wall St, so it’s exciting to see Crane Co. (NYSE: CR) will trade with no dividends for the next three days. The ex-dividend day is one day before the record date, the day on which shareholders must be on the company’s books to receive a dividend. It is important to be aware of the ex-dividend date as any trade in the stock must be done on or before the cutoff date. This means that investors who buy Crane stock on or after August 30th will not receive the dividend, which will be paid on September 8th.

The company’s next dividend payment is $ 0.43 per share. Last year, the company paid out a total of $ 1.72 to shareholders. Calculating last year’s payments shows that Crane has a trailing return of 1.7% versus its current share price of $ 101.51. If you’re buying this business for its dividend, you should have an idea of ​​whether Crane’s dividend is reliable and sustainable. So we need to investigate whether Crane can afford its dividend and whether the dividend could go up.

Check out our latest analysis for Cranes

Dividends are usually paid out of company income. So when a company pays out more than it earned, there is usually a higher risk of its dividend being cut. Crane paid out a comfortable 31% of its profits last year. A useful secondary check can be to assess whether Crane has generated enough free cash flow to pay its dividend. It paid out 25% of its free cash flow as dividends last year, which is conservatively low.

It is positive to see that Crane’s dividend is covered by both profit 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 cut.

Click here to view the company’s payout ratio, as well as analyst estimates for its future dividends.

NYSE: CR Historic Dividend August 26, 2021

Have profits and dividends grown?

Companies with strong growth prospects are usually the best dividend payers because it’s easier to increase dividends when earnings per share improve. If business goes into a downturn and the dividend is cut, the company’s value could plummet. With this in mind, we are encouraged by the steady growth at Crane, with average earnings per share of 7.1% over the past five years. Management has reinvested more than half of the company’s profits within the company, and the company has been able to grow profits with this retained capital. Companies that invest heavily in themselves tend to get stronger over time, which can bring attractive perks like higher profits and dividends.

Many investors will judge a company’s dividend performance by assessing how much dividend payments have changed over time. Over the past 10 years, Crane has increased its dividend by an average of about 6.5% per year. We’re excited to see dividends rising along with earnings over the years, which could be a sign that the company intends to share the growth with shareholders.

Last snack

Is Crane an attractive dividend stock, or is it better on the shelf? Earnings per share growth is up a bit, and Crane pays less than half of its earnings and cash flow in dividends. This is interesting for several reasons, as it suggests that management may reinvest heavily in the business, but it also offers scope to raise the dividend in a timely manner. It might be nice to see earnings grow faster, but Crane is conservative on its dividend payouts and could still perform well in the long run. It is a promising combination that should mark this company that deserves closer attention.

With that in mind, you should investigate the risks Crane is exposed to. For example – crane has 1 warning sign We think you should be aware of this.

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.

When you choose to trade with Crane, you are using the lowest cost * platform ranked # 1 overall by Barron’s Interactive Brokers. Trade stocks, options, futures, forex, bonds and funds in 135 markets, all from a single integrated account. Funded

This article from Simply Wall St is of a general nature. We only provide comments based on historical data and analyst projections using an unbiased methodology, and our articles are not intended as financial advice. It is not a recommendation to buy or sell stocks and does not take into account your goals or your financial situation. Our goal is to provide you with long-term, focused analysis based on fundamentals. Note that our analysis may not take into account the latest company announcements or quality material, which may be sensitive to the price. Simply Wall St has no position in the stocks mentioned.
* Interactive Brokers rated as the lowest cost broker by StockBrokers.com Annual Online Review 2020

Do you have any feedback on this article? Concerned about the content? Get in touch directly with us. Alternatively, send an email to the editorial team (at) simplywallst.com.