Chesswood Group Limited (TSE:CHW) is on the brink of its upcoming ex-dividend date, set for November 29th. Investors are eyeing the company's scheduled December 15th dividend payment of CA$0.01 per share. To be eligible for this payment, shareholders must complete their purchase before the ex-dividend date, considering the two business day settlement period required for trades.
The annual dividend currently stands at CA$0.53 per share, which, against a stock price of CA$6.65, translates to a yield of approximately 7.5%. Despite this attractive yield, the company's high payout ratio, which hovers at an unsettling 99% of earnings, brings into question the long-term viability of these payments.
Over the past five years, Chesswood Group has witnessed a concerning decline in earnings, averaging an 18% drop annually. This downward trajectory has raised red flags about the future stability of its dividends and has led to increased scrutiny regarding the sustainability of these payments.
Current analysis suggests that Chesswood Group may not be a prudent choice for investors seeking dependable dividend income. The combination of high payout ratios and diminishing earnings signals potential cuts on the horizon. Moreover, investment analysts have highlighted additional risks within Chesswood Group's financial framework that could impact investor returns.
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