The Crown Resorts Ltd (ASX: CWN) share price is down around 14% over the last 12 months, but before we start loading up on shares in the hotel and gaming operator for its juicy divided there are a few things we need to check. The first is when the shares will go ex-dividend. This is the date when shares start selling without the value of its next dividend payment and for Crown Resorts this will be next week on Wednesday March 20, 2019. An investor needs to own the shares before the ex-date to receive the dividend which will be…
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The Crown Resorts Ltd (ASX: CWN) share price is down around 14% over the last 12 months, but before we start loading up on shares in the hotel and gaming operator for its juicy divided there are a few things we need to check.
The first is when the shares will go ex-dividend. This is the date when shares start selling without the value of its next dividend payment and for Crown Resorts this will be next week on Wednesday March 20, 2019.
An investor needs to own the shares before the ex-date to receive the dividend which will be paid on Thursday April 4, 2019.
What is Crown Resorts’ dividend yield?
At its recent half year results Crown Resorts declared an interim dividend of 30 cents per share (cps) for the six months to 31 December, 2018. This was flat on the same period in 2017 and at the current share price offers a trailing dividend yield of 5.2%, partly franked.
Is the dividend sustainable going forward?
This is great question to ask of before buying any company for its dividend.
Crown Resorts operates what is known as a stable dividend policy which aims to pay 60 cents per share per year, subject to the company’s financial position.
The approach is similar to the policy offered by SKYCITY Entertainment Group Limited (ASX: SKC) and the objective is to essentially recognise that a large proportion of shareholders view the company as an income source and place a lot of value on that.
The dividend policy makes sense for mature companies and is usually set at a level where the company still has some cash to re-invest in projects or pay down debt. In the 2018 financial year Crown’s dividend was 74% of earnings per share which leaves it plenty of headroom.
Crown Resorts’ dividend is clearly tailored to income seeking investors and certainly looks sustainable based on the company’s strong earnings. Both Crown and SKYCITY Entertainment are investing heavily in new capital projects which will help earnings grow over the coming years and I think either company would be a good addition to an income portfolio.
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You can follow him on Twitter @Regan_Invests.
The Motley Fool Australia owns shares of and has recommended Crown Resorts Limited. The Motley Fool Australia has recommended Sky City Entertainment Group Ltd. and Webjet Ltd. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.