AUS
NZ
UK
CA
USA
FRA
GER
ESP
ITA
NLD
PRT
SWE
GRC
IND
POL
BRA
ZAF
RUS
CHN
UAE
Whitecap Resources Inc. (TSX:WCP) is about to go ex-dividend soon, meaning investors who wish to receive the company’s upcoming dividend will need to act quickly. The ex-dividend date is set for September 27, 2024. Any investor purchasing shares on or after this date will not be eligible for the dividend payout, which is scheduled for October 15, 2024. Let’s dive deeper into what this means for potential investors and explore the company’s dividend performance and prospects.
Key Dates for Dividend Investors
The ex-dividend date is one day prior to the record date, the day when a company identifies its shareholders who qualify to receive the upcoming dividend. Whitecap Resources will pay out CA$0.0608 per share as the next dividend installment. For the past 12 months, the company has distributed a total of CA$0.73 per share in dividends. With a current stock price of CA$10.49, Whitecap’s trailing yield stands at an attractive 7.0%, making it a notable option for dividend-focused investors.
Is Whitecap's Dividend Sustainable?
While dividends can significantly enhance investment returns, they are only valuable if they are sustainable. Therefore, investors should always assess whether a company can maintain or grow its dividend in the long term. One key metric for dividend sustainability is the payout ratio, which measures the proportion of earnings that are paid out as dividends.
Whitecap Resources has paid out 54% of its earnings as dividends over the last year, which falls within the standard range for most companies. This balance suggests the company has room to reinvest a portion of its profits while still rewarding shareholders.
Another important factor is free cash flow, which indicates a company’s ability to fund its dividends without relying solely on reported earnings. Whitecap paid out 65% of its free cash flow as dividends last year, further reinforcing that the payout is within reasonable limits.
The combination of a moderate payout ratio and a dividend backed by free cash flow indicates that Whitecap Resources' dividend is currently sustainable, barring a significant decline in earnings.
Earnings and Dividend Growth: A Positive Trend
For long-term dividend investors, a company’s ability to grow both its earnings and its dividend is crucial. Whitecap Resources has demonstrated impressive earnings growth, with a 52% annual increase in earnings over the past five years. This rapid growth suggests that the company is in a strong position to maintain or even increase its dividend payouts.
Despite the strong growth in earnings, Whitecap has maintained a measured approach to dividend increases, raising its dividend by an average of 1.5% per year over the past decade. While this dividend growth is relatively modest compared to the earnings surge, it reflects a balanced strategy where the company reinvests profits to fuel further expansion.
