COG Financial Services (ASX: COG) Will Pay A Larger Dividend Than Last Year At AU$0.06

Recently there was news by the board of COG Financial Services Limited that they will be increasing its dividend to AU$0.06 on the 22nd of October. This change will increase the annual payment from 5.1% to 8.5% of the stock price, in general, this is above most companies’ annual pay.

COG Financial Services Find It Hard To Continue The Dividend

According to the news, if the payments aren’t done properly, even getting a higher yield for a few years won’t matter that much. COG Financial Services was not successful in making any profits since and has been paying out less than 75% of its free cash flow, which means that there is a lot left over to reinvest in the business. As in general what we know about the cash flow and how important it is than any other measures of profit, so we are comfortable with the dividend  correctly at its place

In recent years, EPShad had degraded by 79.1% based on the performance. This can even mean that the company may not get any profit for at least till the next year, but with all the healthy cash flows at this time everything would be alright to continue.

COG Financial Services Doesn’t have any Long Payment History

It is a difficult decision to make a judgment on how stable the dividend can be when the company is not being able to pay one for very long. This also means that the company is unable to pay a good dividend, but to be sure about that we would have to wait until it can prove itself.

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Dividend Growth Potential can be Shaky. Investors can even be attracted to the stock on the basis of the quality of its payment history. However, these aren’t always that easy. Over the past five years, it looks as difficult for COG Financial Services’ EPS to have declined by almost  79% a year. With so many fast declines there is a possibility to have the potential to constrain dividend payments if the trend is going on into the future.

It is always important to know the dividend is being raised, and  COG Financial Services’ payments are being completely solid. The company is making a huge amount of money, which will help to maintain the dividend for a time now, but the track record hasn’t been that good. 

COG Financial Services
COG Financial Services

Companies who are searching for a better dividend policy would definitely enjoy greater investor interest rather than those who are facing a more inconsistent approach. Still, the investors are required to take into consideration a lot of other factors, apart from dividend payments.

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This article by Simply Wall St is easy to understand and not so complex in nature. All the details have been provided on a commentary basis and on historical data and analyst forecasts and are using an unbiased methodology and these articles are not intended to provide any financial advice. It does not provide any details or recommendations to buy or sell any stock, Also it does not take any responsibility for your goals, or your financial situation. Here they focus on bringing you a long-term focused analysis driven by fundamental data. 

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