Regular readers will know that we love our dividends at Simply Wall St, which is why it’s exciting to see Carrier Global Corporation (NYSE:CARR) is about to trade ex-dividend in the next 4 days. If you purchase the stock on or after the 29th of October, you won’t be eligible to receive this dividend, when it is paid on the 23rd of November.
The upcoming dividend for Carrier Global will put a total of US$0.08 per share in shareholders’ pockets. Dividends are a major contributor to investment returns for long term holders, but only if the dividend continues to be paid. As a result, readers should always check whether Carrier Global has been able to grow its dividends, or if the dividend might be cut.
See our latest analysis for Carrier Global
Dividends are typically paid from company earnings. If a company pays more in dividends than it earned in profit, then the dividend could be unsustainable. Carrier Global paid out just 5.4% of its profit last year, which we think is conservatively low and leaves plenty of margin for unexpected circumstances.
Click here to see the company’s payout ratio, plus analyst estimates of its future dividends.
Have Earnings And Dividends Been Growing?
Companies that aren’t growing their earnings can still be valuable, but it is even more important to assess the sustainability of the dividend if it looks like the company will struggle to grow. Investors love dividends, so if earnings fall and the dividend is reduced, expect a stock to be sold off heavily at the same time.
This is Carrier Global’s first year of paying a dividend, which is exciting for shareholders – but it does mean there’s no dividend history to examine.
The Bottom Line
Is Carrier Global an attractive dividend stock, or better left on the shelf? Earnings per share have been flat in recent years, although Carrier Global reinvests more than half its earnings in the business, which could suggest there are some growth projects that have not yet reached fruition. Carrier Global ticks a lot of boxes for us from a dividend perspective, and we think these characteristics should mark the company as deserving of further attention.
In light of that, while Carrier Global has an appealing dividend, it’s worth knowing the risks involved with this stock. For example, we’ve found 3 warning signs for Carrier Global (1 is significant!) that deserve your attention before investing in the shares.
If you’re in the market for dividend stocks, we recommend checking our list of top dividend stocks with a greater than 2% yield and an upcoming dividend.
This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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