Don't Buy Canaccord Genuity Group Inc. (TSE:CF) For Its Next Dividend Without Doing These Checks

Yahoo

23-02-2025

Some investors rely on dividends for growing their wealth, and if you're one of those dividend sleuths, you might be intrigued to know that Canaccord Genuity Group Inc. (TSE:CF) is about to go ex-dividend in just four days. The ex-dividend date is one business day before the record date, which is the cut-off date for shareholders to be present on the company's books to be eligible for a dividend payment. The ex-dividend date is an important date to be aware of as any purchase of the stock made on or after this date might mean a late settlement that doesn't show on the record date. Thus, you can purchase Canaccord Genuity Group's shares before the 28th of February in order to receive the dividend, which the company will pay on the 13th of March.
The company's next dividend payment will be CA$0.085 per share. Last year, in total, the company distributed CA$0.34 to shareholders. Calculating the last year's worth of payments shows that Canaccord Genuity Group has a trailing yield of 4.0% on the current share price of CA$8.56. Dividends are an important source of income to many shareholders, but the health of the business is crucial to maintaining those dividends. So we need to check whether the dividend payments are covered, and if earnings are growing.
See our latest analysis for Canaccord Genuity Group
Dividends are typically paid out of company income, so if a company pays out more than it earned, its dividend is usually at a higher risk of being cut. Canaccord Genuity Group lost money last year, so the fact that it's paying a dividend is certainly disconcerting. There might be a good reason for this, but we'd want to look into it further before getting comfortable.
Click here to see the company's payout ratio, plus analyst estimates of its future dividends.
Companies with falling earnings are riskier for dividend shareholders. If business enters a downturn and the dividend is cut, the company could see its value fall precipitously. Canaccord Genuity Group was unprofitable last year and, unfortunately, the general trend suggests its earnings have been in decline over the last five years, making us wonder if the dividend is sustainable at all.
Another key way to measure a company's dividend prospects is by measuring its historical rate of dividend growth. In the past 10 years, Canaccord Genuity Group has increased its dividend at approximately 5.4% a year on average.
Remember, you can always get a snapshot of Canaccord Genuity Group's financial health, by checking our visualisation of its financial health, here.
From a dividend perspective, should investors buy or avoid Canaccord Genuity Group? First, it's not great to see the company paying a dividend despite being loss-making over the last year. Worse, the general trend in its earnings looks negative in recent years. Canaccord Genuity Group doesn't appear to have a lot going for it, and we're not inclined to take a risk on owning it for the dividend.
Having said that, if you're looking at this stock without much concern for the dividend, you should still be familiar of the risks involved with Canaccord Genuity Group. For example, Canaccord Genuity Group has 3 warning signs (and 1 which shouldn't be ignored) we think you should know about.
A common investing mistake is buying the first interesting stock you see. Here you can find a full list of high-yield dividend stocks.
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