June 19, 2024
Do These 3 Checks Before Buying Avient Corporation (NYSE:AVNT) for its Upcoming Dividend


Readers are expected to buy Aviant Corporation (NYSE:AVNT) will need to act on its dividend soon, as the stock is about to trade ex-dividend. The ex-dividend date is usually set one business day before the record date, which is the cut-off date on which you must appear in the company’s books as a shareholder to receive the dividend. The ex-dividend date is an important date to be aware of because any purchases of stock made on or after this date may mean late settlements that are not reflected on the record date. So, if you buy Aviant shares on or after September 14, you will not be eligible to receive the dividend when it is paid on October 6.

The company’s upcoming dividend is US$0.25 per share, which follows from the last 12 months, when the company distributed a total of US$0.99 per share to shareholders. Based on the last year’s worth of payments, Aviant has a trailing yield of 2.6% on the current stock price of $37.63. If you buy this business for its dividend, you should know whether Aviant’s dividend is reliable and sustainable. So we need to investigate whether Aviant can afford its dividend, and whether the dividend can grow.

See our latest analysis for Aviant

Dividends are generally paid from company earnings. If a company pays dividends that exceed its profits, the dividend may be unsustainable. Aviant paid a dividend last year, despite being unprofitable. This may be a one-time event, but it is not a long-lasting condition. With recent losses, it is important to check whether the business generated enough cash to pay its dividend. If Aviant doesn’t generate enough cash to pay the dividend, it will have to pay it either with cash in the bank or by borrowing money, neither of which is sustainable in the long term. It paid out 59% of its free cash flow as dividends over the last year, within the normal range for most companies.

Click here to see the company’s payout ratio and analyst estimates of its future dividends.

historical-dividend

Are earnings and dividends growing?

Businesses with declining earnings are difficult from a dividend perspective. Investors love dividends, so if earnings fall and the dividend is cut, expect the stock to sell off heavily at that very moment. Aviant was unprofitable last year and, unfortunately, the general trend shows that its earnings have declined over the last five years, leading us to wonder if the dividend is sustainable at all.

Another important way to measure a company’s dividend prospects is to measure its historical rate of dividend growth. Over the past 10 years, Aviant has increased its dividend by an average of about 17% per year.

Get our latest analysis on Aviant’s balance sheet health here.

Bottom-line

Does Aviant have what it takes to maintain its dividend payout? First of all, it’s not nice to see that a company is paying a dividend despite making losses last year. The good thing is that the dividend was covered by free cash flow.” Bottom Line: Aviant has some unfortunate characteristics that we think could lead to sub-optimal results for dividend investors.

Having said that, if you’re looking at this stock without worrying too much about the dividend, you should still be familiar with the risks associated with Aviant. We’ve identified 2 warning signs With Avient (at least 1 that shouldn’t be overlooked), and understanding these should be part of your investing process.

In general, we wouldn’t recommend buying the first dividend stock you see. is here A curated list of interesting stocks that are strong dividend payers.

Have any feedback on this article? Concerned about ingredients? keep in touch directly with us. Alternatively, email editorial-team(at)Simplewallst.com.

This article from Simply Wall St is of a general nature. We only provide commentary based on historical data and analyst forecasts using unbiased methodology and our articles are not intended to provide financial advice. It does not recommend buying or selling any stock, and does not take into account your objectives, or your financial situation. Our goal is to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not take into account the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any of the stocks mentioned.

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