C-Com Satellite Systems Inc. (CVE:CMI) recently announced that it will be paying a dividend of CA$0.0125 on the 16th of February, resulting in a dividend yield of 4.2%. While this may seem appealing to investors, there are concerns about the sustainability of these dividend payments.
Although C-Com Satellite Systems is currently not generating a profit, it has continued to pay out dividends. However, the company is also not generating any free cash flow, raising doubts about the long-term sustainability of the dividend. With a projected 30.7% decrease in earnings per share (EPS) over the next year, the company may face a decision between suspending the dividend or tapping into its cash reserves to meet the payment.
While C-Com Satellite Systems has maintained a consistent track record of paying dividends with minimal fluctuations, the rate of growth has been relatively slow at 2.3% per annum since 2014. This steady but lackluster growth may deter some investors who are seeking higher returns.
Furthermore, the company’s declining EPS, which has fallen by approximately 31% per year over the past five years, indicates that it is going through a challenging period. This decline could further strain its ability to increase the dividend payout in the future.
Considering these factors, it is important for investors to evaluate whether the current level of dividend payment is sustainable in the long run. While consistent dividend payments are desirable, the high dividend yield may not be sustainable, making C-Com Satellite Systems a less attractive stock for income-focused investors.
Additionally, it is crucial to consider other factors and warning signs before investing in the company. Simply Wall St has identified three warning signs for C-Com Satellite Systems, including two particularly concerning ones, which investors should take into account.
In conclusion, while C-Com Satellite Systems currently offers a consistent dividend payment, concerns about its sustainability and slower growth rate raise doubts about its attractiveness as an investment option. Investors should carefully evaluate the company’s financial health and potential risks before making any decisions.
An FAQ section based on the main topics and information presented in the article:
1. Q: What is C-Com Satellite Systems Inc.?
A: C-Com Satellite Systems Inc. is a company listed on the Canadian Venture Exchange (CVE:CMI) that provides mobile satellite antenna systems for communication purposes.
2. Q: What dividend will C-Com Satellite Systems be paying on February 16th?
A: C-Com Satellite Systems will be paying a dividend of CA$0.0125 on February 16th.
3. Q: What is the dividend yield of C-Com Satellite Systems?
A: The dividend yield of C-Com Satellite Systems is 4.2%.
4. Q: Is C-Com Satellite Systems currently generating a profit?
A: No, C-Com Satellite Systems is currently not generating a profit.
5. Q: Is C-Com Satellite Systems generating any free cash flow?
A: No, C-Com Satellite Systems is not generating any free cash flow.
6. Q: What is the expected decrease in earnings per share (EPS) for C-Com Satellite Systems?
A: C-Com Satellite Systems is projected to have a 30.7% decrease in earnings per share over the next year.
7. Q: What is the rate of growth of C-Com Satellite Systems’ dividends?
A: The rate of growth of C-Com Satellite Systems’ dividends has been 2.3% per year since 2014.
8. Q: How much has C-Com Satellite Systems’ EPS declined over the past five years?
A: C-Com Satellite Systems’ EPS has fallen by approximately 31% per year over the past five years.
9. Q: Is the current level of dividend payment sustainable for C-Com Satellite Systems in the long run?
A: There are concerns about the sustainability of C-Com Satellite Systems’ dividend payment due to its lack of profitability, declining EPS, and slow growth rate.
10. Q: What warning signs have been identified for C-Com Satellite Systems?
A: Simply Wall St has identified three warning signs for C-Com Satellite Systems, including two particularly concerning ones.
Definitions for key terms or jargon used within the article:
1. Dividend yield: It is a financial ratio that shows the percentage return on a company’s dividend as a percentage of its share price.
2. Free cash flow: It is the cash a company generates from its operations after deducting capital expenditures.
3. Earnings per share (EPS): It is a company’s net income divided by the number of outstanding shares, representing the profitability of the company on a per-share basis.