MRS Logística (BVMF:MRSA3B) Could Be A Buy For Its Upcoming Dividend

Readers hoping to buy MRS Logística S.A. (BVMF:MRSA3B) for its dividend will need to make their move shortly, as the stock is about to trade ex-dividend. Typically, the ex-dividend date is two business days before the record date, which is the date on which a company determines the shareholders eligible to receive a dividend. The ex-dividend date is an important date to be aware of as any purchase of the stock made on or after this date might mean a late settlement that doesn't show on the record date. Thus, you can purchase MRS Logística's shares before the 4th of May in order to receive the dividend, which the company will pay on the 1st of January. The company's next dividend payment will be R$1.046094 per share. Last year, in total, the company distributed R$1.09 to shareholders. Looking at the last 12 months of distributions, MRS Logística has a trailing yield of approximately 2.6% on its current stock price of R$41.79. Dividends are a major contributor to investment returns for long term holders, but only if the dividend continues to be paid. That's why we should always check whether the dividend payments appear sustainable, and if the company is growing. Trump has pledged to "unleash" American oil and gas and these 15 US stocks have developments that are poised to benefit. Dividends are usually paid out of company profits, so if a company pays out more than it earned then its dividend is usually at greater risk of being cut. MRS Logística paid out just 24% of its profit last year, which we think is conservatively low and leaves plenty of margin for unexpected circumstances. A useful secondary check can be to evaluate whether MRS Logística generated enough free cash flow to afford its dividend. Dividends consumed 50% of the company's free cash flow last year, which is within a normal range for most dividend-paying organisations. It's positive to see that MRS Logística's dividend is covered by both profits and cash flow, since 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 gets cut. See our latest analysis for MRS Logística Click here to see how much of its profit MRS Logística paid out over the last 12 months. Have Earnings And Dividends Been Growing? Companies with consistently growing earnings per share generally make the best dividend stocks, as they usually find it easier to grow dividends per share. Investors love dividends, so if earnings fall and the dividend is reduced, expect a stock to be sold off heavily at the same time. That's why it's comforting to see MRS Logística's earnings have been skyrocketing, up 29% per annum for the past five years. Many investors will assess a company's dividend performance by evaluating how much the dividend payments have changed over time. Since the start of our data, two years ago, MRS Logística has lifted its dividend by approximately 16% a year on average. It's great to see earnings per share growing rapidly over several years, and dividends per share growing right along with it. Final Takeaway Has MRS Logística got what it takes to maintain its dividend payments? Earnings per share have grown at a nice rate in recent times and over the last year, MRS Logística paid out less than half its earnings and a bit over half its free cash flow. It's a promising combination that should mark this company worthy of closer attention. While it's tempting to invest in MRS Logística for the dividends alone, you should always be mindful of the risks involved. To help with this, we've discovered 2 warning signs for MRS Logística (1 is potentially serious!) that you ought to be aware of before buying the shares. If you're in the market for strong dividend payers, we recommend checking our selection of top dividend stocks.