The J. M. Smucker Company (NYSE:SJM) stock is about to trade ex-dividend in four days. The ex-dividend date is usually set to be one business day before the record date, which is the cut-off date on which you must be present on the company's books as a shareholder in order to receive the dividend. The ex-dividend date is of consequence because whenever a stock is bought or sold, the trade takes at least one business day to settle. Meaning, you will need to purchase J. M. Smucker's shares before the 16th of May to receive the dividend, which will be paid on the 2nd of June.

The company's next dividend payment will be US$1.08 per share, and in the last 12 months, the company paid a total of US$4.32 per share. Based on the last year's worth of payments, J. M. Smucker stock has a trailing yield of around 3.9% on the current share price of US$111.54. Dividends are an important source of income to many shareholders, but the health of the business is crucial to maintaining those dividends. So we need to investigate whether J. M. Smucker can afford its dividend, and if the dividend could grow.

Our free stock report includes 3 warning signs investors should be aware of before investing in J. M. Smucker. Read for free now.

Dividends are usually paid out of company profits, so if a company pays out more than it earned then its dividend is usually at greater risk of being cut. J. M. Smucker's dividend is not well covered by earnings, as the company lost money last year. This is not a sustainable state of affairs, so it would be worth investigating if earnings are expected to recover. Given that the company reported a loss last year, we now need to see if it generated enough free cash flow to fund the dividend. If J. M. Smucker didn't generate enough cash to pay the dividend, then it must have either paid from cash in the bank or by borrowing money, neither of which is sustainable in the long term. Over the last year it paid out 56% of its free cash flow as dividends, within the usual range for most companies.

View our latest analysis for J. M. Smucker

Click here to see the company's payout ratio, plus analyst estimates of its future dividends.NYSE:SJM Historic Dividend May 11th 2025

Have Earnings And Dividends Been Growing?

When earnings decline, dividend companies become much harder to analyse and own safely. If earnings fall far enough, the company could be forced to cut its dividend. J. M. Smucker was unprofitable last year and, unfortunately, the general trend suggests its earnings have been in decline over the last five years, making us wonder if the dividend is sustainable at all.

Story Continues

Many investors will assess a company's dividend performance by evaluating how much the dividend payments have changed over time. J. M. Smucker has delivered an average of 5.4% per year annual increase in its dividend, based on the past 10 years of dividend payments.

Remember, you can always get a snapshot of J. M. Smucker's financial health, by checking our visualisation of its financial health, here.

The Bottom Line

Has J. M. Smucker got what it takes to maintain its dividend payments? First, it's not great to see the company paying a dividend despite being loss-making over the last year. On the plus side, the dividend was covered by free cash flow." Overall it doesn't look like the most suitable dividend stock for a long-term buy and hold investor.

Although, if you're still interested in J. M. Smucker and want to know more, you'll find it very useful to know what risks this stock faces. To help with this, we've discovered 3 warning signs for J. M. Smucker (1 makes us a bit uncomfortable!) that you ought to be aware of before buying the shares.

Generally, we wouldn't recommend just buying the first dividend stock you see. Here's a curated list of interesting stocks that are strong dividend payers.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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