The forthcoming dividend payment by Cable One is scheduled against a backdrop of concerns regarding its long-term financial health. The company has announced an ex-dividend date of November 27th, with shareholders set to receive their payouts on December 15th. This distribution of $2.95 per share follows last year's total dividend of $11.80 per share, which yielded a rate of 2.1%.
Despite uncertainties stemming from a consistent decline in annual earnings, approximately one-fifth, the company has maintained a history of increasing its dividends annually by an average of 8.8%. However, the contrast between diminishing profits and strong dividend growth raises questions about the company's capacity to reinvest and sustain future shareholder returns, especially in a volatile market environment.
Interestingly, Cable One's profit payout ratio stands at 87%, indicating a significant portion of its earnings is returned to shareholders as dividends. Yet, this high payout ratio does not fully reflect the company's financial flexibility, as only 21% of its free cash flow is used for these payments. This suggests that despite the earnings downturn and concerns over future dividend stability, Cable One has managed to retain some resilience in its financial strategy.
InvestingPro Insights
Given the focus of the article on Cable One's dividend payment and financial health, relevant insights from InvestingPro can provide valuable context for readers. With a commitment to strong earnings and a history of dividend growth, Cable One has demonstrated a level of financial diligence that may reassure investors. The InvestingPro Tips highlight that the company has raised its dividend for 9 consecutive years and has maintained these payments over the same period, which aligns with the article's emphasis on Cable One's dividend consistency.
Delving into the real-time data from InvestingPro, we see that Cable One's market capitalization stands at $3.09 billion, and it currently trades at a high earnings multiple, with a P/E ratio of 41.38. Despite a slight revenue decline in the last twelve months as of Q3 2023, the company's gross profit margin remains robust at 73.56%, showcasing its ability to manage costs effectively. Moreover, the dividend yield as of August 28, 2023, is 2.15%, which is in line with the yield rate mentioned in the article.
Investors considering Cable One's financials might find solace in the company's liquidity position, as its liquid assets exceed short-term obligations, an InvestingPro Tip that speaks to the company's capability to meet short-term liabilities.
For readers interested in a deeper analysis, InvestingPro offers additional tips, including insights on analyst predictions and the company's profitability over the last twelve months. It's worth noting that InvestingPro subscription is now on a special Black Friday sale, offering up to 55% off, and includes a total of 11 tips for Cable One, providing a comprehensive outlook for investors.
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