Village Super Market, Inc. stock is set to go ex-dividend in four days. The ex-dividend date, occurring one business day before the record date, signifies when the company identifies shareholders entitled to receive dividends.
The settlement involves two full business days, making the ex-dividend date crucial. Missing this date means shareholders won’t appear on the company’s books on the record date.
The upcoming dividend is US$0.25 per share, continuing the trend from the past 12 months when the company disbursed a total of US$1.00 per share.
Investors eyeing this stock for its dividend should assess if Village Super Market’s dividend is reliable and sustainable. Hence, it’s prudent to verify if Village Super Market has consistently grown its dividends or faces potential cuts.
Dividends are typically funded from company profits, making a company vulnerable to dividend cuts if it pays out more than it earns. Hence, Village Super Market’s modest payout ratio of 28% of its earnings is reassuring.
Additionally, evaluating whether the company generated enough free cash flow to cover the dividend is a worthwhile secondary check.
Village Super Market’s dividend payments represented only 26% of the free cash flow it generated, indicating a comfortable payout ratio.
