High Dividend Opportunity in Chevron Stocks

Pay Attention to the Dividend Date for Chemron Shares!

Chemron Corporation (NYSE:CVX) shares will trade independently of the dividend date in the next 4 days. This date, determined one business day before the dividend date, is the last date that investors must be a registered shareholder with the company to receive the dividend. It is crucial for investors to pay attention to this date, as purchases made after this date may be reflected in the records with a delay. Therefore, purchasing Chemron shares before November 18 is necessary to receive the dividend to be paid on December 10.

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

Dividends are generally paid from the company’s earnings. If a company pays out more in dividends than it earns, this poses risks to long-term sustainability. Chemron stands out by distributing 95% of its earnings as dividends; this ratio is not very promising unless there are certain adverse conditions. However, cash flow generally takes precedence over earnings when evaluating dividend sustainability. Chemron distributes 79% of its free cash flow as dividends. While this ratio generally remains within acceptable limits, it may limit the company’s ability to increase dividends.

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

The company's earnings per share have been steadily increasing; it experienced a growth rate of 32% per year over the last five years. In general, companies with strong growth potential tend to be the best dividend payers. When reviewing the dividend payout ratio, investors should look at the historical dividend growth rate. Over the past decade, Chemron achieved an average annual dividend increase of 4.8%; this indicates that the company has been reinvesting its earnings into business growth.

So, should investors consider Chemron shares? The company’s earnings show good growth; however, the difference between cash flow and earnings distribution ratios may indicate that there could have been some impairment reports last year. It may be important to investigate whether Chemron is reinvesting in its growth projects, but currently, the expectations for dividends are not very optimistic.

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

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