Camping World Holdings, Inc. (NYSE:CWH) stock is about to trade ex-dividend in 4 days time. If you purchase the stock on or after the 13th of September, you won’t be eligible to receive this dividend, when it is paid on the 30th of September.
Camping World Holdings’s next dividend payment will be US$0.15 per share. Last year, in total, the company distributed US$0.61 to shareholders. Last year’s total dividend payments show that Camping World Holdings has a trailing yield of 7.8% on the current share price of $7.85. Dividends are an important source of income to many shareholders, but the health of the business is crucial to maintaining those dividends. As a result, readers should always check whether Camping World Holdings has been able to grow its dividends, or if the dividend might be cut.
View our latest analysis for Camping World Holdings
If a company pays out more in dividends than it earned, then the dividend might become unsustainable – hardly an ideal situation. Camping World Holdings reported a loss last year, so it’s not great to see that it has continued paying a dividend. With the recent loss, it’s important to check if the business generated enough cash to pay its dividend. If cash earnings don’t cover the dividend, the company would have to pay dividends out of cash in the bank, or by borrowing money, neither of which is long-term sustainable. It distributed 46% of its free cash flow as dividends, a comfortable payout level for most companies.
Click here to see the company’s payout ratio, plus analyst estimates of its future dividends.
Have Earnings And Dividends Been Growing?
When earnings decline, dividend companies become much harder to analyse and own safely. If earnings decline and the company is forced to cut its dividend, investors could watch the value of their investment go up in smoke. Camping World Holdings reported a loss last year, and the general trend suggests its earnings have also been declining in recent years, making us wonder if the dividend is at risk.
Another key way to measure a company’s dividend prospects is by measuring its historical rate of dividend growth. Camping World Holdings has delivered an average of 24% per year annual increase in its dividend, based on the past 3 years of dividend payments.
Get our latest analysis on Camping World Holdings’s balance sheet health here.
To Sum It Up
Should investors buy Camping World Holdings for the upcoming dividend? It’s hard to get used to Camping World Holdings paying a dividend despite reporting a loss over the past year. At least the dividend was covered by free cash flow, however. Overall it doesn’t look like the most suitable dividend stock for a long-term buy and hold investor.
Ever wonder what the future holds for Camping World Holdings? See what the ten analysts we track are forecasting, with this visualisation of its historical and future estimated earnings and cash flow
We wouldn’t recommend just buying the first dividend stock you see, though. Here’s a list of interesting dividend stocks with a greater than 2% yield and an upcoming dividend.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.