High Dividend Opportunity in Chevron Stocks

Pay Attention to Chevron Dividend Date!

Chemron Corporation (NYSE:CVX) shares will trade independently of the dividend date in the next 4 days. The date determined one business day before the dividend date is the last date that investors need to be a registered shareholder in order to receive dividends. It is very important for investors to pay attention to this date, as purchases made after this date may be recorded with a delay. Therefore, buying Chemron shares before November 18 is necessary to receive the dividend payable on December 10.

Chemron plans to pay a dividend of $1.71 per share for this period. In the last 12 months, it distributed a total of $6.84 per share to investors. Calculations based on the current share price of $153.32 indicate that Chemron has an annual yield of 4.5%. The sustainability of dividend payments and the company's growth potential should always be considered.

Dividends are generally paid out of company earnings. If a company pays more in dividends than its earnings, this poses a risk to long-term sustainability. Chemron stands out for distributing 95% of its earnings as dividends; this ratio is not particularly encouraging unless there are adverse circumstances. However, cash flow usually comes before earnings when assessing dividend sustainability. Chemron distributes 79% of its free cash flow as dividends. Although this ratio remains generally acceptable, it could limit the company's ability to increase dividends.

Although Chemron's dividends are not fully covered by earnings, they seem reasonable in terms of cash flow. Still, if the company continues to distribute a high percentage of its earnings as dividends, the dividend could be at risk if things go poorly.

The company's earnings per share have been consistently increasing; it recorded an annual growth rate of 32% over the last five years. Generally, companies with strong growth potential tend to be the best dividend payers. By examining the dividend payout ratio, investors should take a look at the historical dividend growth rate. Over the last decade, Chemron has achieved an average annual dividend increase of 4.8%, indicating that the company has been reinvesting more of its earnings into business growth.

So, should investors prefer Chemron shares? The company's earnings show good growth; however, the disparity between cash flow and earnings distribution ratios may indicate some impairment reports last year. It may be important to investigate whether Chemron is reinvesting in its growth projects, but for now, the dividend expectations are not very optimistic.

Finally, if dividends are not a priority for you, you should also consider the other risks that Chemron faces. In this regard, we have identified 2 warning signs to watch for regarding Chemron.

If you are looking for strong dividend payers, we recommend checking our selection of the best dividend stocks.