Ford Motor Firm (NYSE:F) inventory is about to commerce ex-dividend in 2 days. The ex-dividend date is one enterprise day earlier than the document date, which is the closing date for shareholders to be current on the corporate’s books to be eligible for a dividend fee. The ex-dividend date is necessary as the method of settlement entails two full enterprise days. So in case you miss that date, you wouldn’t present up on the corporate’s books on the document date. Subsequently, if you buy Ford Motor’s shares on or after the 18th of February, you will not be eligible to obtain the dividend, when it’s paid on the third of March.
The corporate’s subsequent dividend fee can be US$0.30 per share, on the again of final yr when the corporate paid a complete of US$0.75 to shareholders. Final yr’s whole dividend funds present that Ford Motor has a trailing yield of seven.9% on the present share worth of US$9.48. We love seeing corporations pay a dividend, nevertheless it’s additionally necessary to make certain that laying the golden eggs is not going to kill our golden goose! So we have to examine whether or not Ford Motor can afford its dividend, and if the dividend may develop.
View our latest analysis for Ford Motor
Dividends are sometimes paid from firm earnings. If an organization pays extra in dividends than it earned in revenue, then the dividend might be unsustainable. That is why it is good to see Ford Motor paying out a modest 41% of its earnings. That stated, even extremely worthwhile corporations generally may not generate sufficient money to pay the dividend, which is why we must always all the time test if the dividend is roofed by money stream. Happily, it paid out solely 36% of its free money stream prior to now yr.
It is encouraging to see that the dividend is roofed by each revenue and money stream. This usually suggests the dividend is sustainable, so long as earnings do not drop precipitously.
Click on here to see the company’s payout ratio, plus analyst estimates of its future dividends.
Companies with robust progress prospects normally make the very best dividend payers, as a result of it is simpler to develop dividends when earnings per share are enhancing. If enterprise enters a downturn and the dividend is lower, the corporate may see its worth fall precipitously. That is why it is comforting to see Ford Motor’s earnings have been skyrocketing, up 163% every year for the previous 5 years. Earnings per share have been rising in a short time, and the corporate is paying out a comparatively low share of its revenue and money stream. This can be a very beneficial mixture that may typically result in the dividend multiplying over the long run, if earnings develop and the corporate pays out the next share of its earnings.
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