Yahoo Finance BHB Brauholding Bayern-Mitte AG (FRA:B9B) Will Pay A €0.06 Dividend In Three Days
BHB Brauholding Bayern-Mitte AG (FRA:B9B) stock is about to trade ex-dividend in three days. The ex-dividend date occurs one day before the record date which is the day on which shareholders need to be on the company's books in order to receive a dividend. The ex-dividend date is of consequence because whenever a stock is bought or sold, the trade takes at least two business day to settle. Therefore, if you purchase BHB Brauholding Bayern-Mitte's shares on or after the 1st of July, you won't be eligible to receive the dividend, when it is paid on the 3rd of July.
The company's upcoming dividend is €0.06 a share, following on from the last 12 months, when the company distributed a total of €0.06 per share to shareholders. Looking at the last 12 months of distributions, BHB Brauholding Bayern-Mitte has a trailing yield of approximately 2.5% on its current stock price of €2.40. If you buy this business for its dividend, you should have an idea of whether BHB Brauholding Bayern-Mitte's dividend is reliable and sustainable. So we need to check whether the dividend payments are covered, and if earnings are growing.
Check out our latest analysis for BHB Brauholding Bayern-Mitte
Dividends are typically paid out of company income, so if a company pays out more than it earned, its dividend is usually at a higher risk of being cut. Its dividend payout ratio is 79% of profit, which means the company is paying out a majority of its earnings. The relatively limited profit reinvestment could slow the rate of future earnings growth. We'd be worried about the risk of a drop in earnings. Yet cash flows are even more important than profits for assessing a dividend, so we need to see if the company generated enough cash to pay its distribution.
Click here to see how much of its profit BHB Brauholding Bayern-Mitte paid out over the last 12 months.
Have Earnings And Dividends Been Growing?
Companies that aren't growing their earnings can still be valuable, but it is even more important to assess the sustainability of the dividend if it looks like the company will struggle to grow. If earnings fall far enough, the company could be forced to cut its dividend. With that in mind, we're not enthused to see that BHB Brauholding Bayern-Mitte's earnings per share have remained effectively flat over the past five years. We'd take that over an earnings decline any day, but in the long run, the best dividend stocks all grow their earnings per share.
Another key way to measure a company's dividend prospects is by measuring its historical rate of dividend growth. BHB Brauholding Bayern-Mitte's dividend payments are broadly unchanged compared to where they were 10 years ago.
Final Takeaway
Is BHB Brauholding Bayern-Mitte an attractive dividend stock, or better left on the shelf? In addition to earnings being flat, BHB Brauholding Bayern-Mitte is paying out a reasonable percentage of its earnings as profits. However, the dividend was not well covered by free cash flow. Bottom line: BHB Brauholding Bayern-Mitte has some unfortunate characteristics that we think could lead to sub-optimal outcomes for dividend investors.
With that in mind though, if the poor dividend characteristics of BHB Brauholding Bayern-Mitte don't faze you, it's worth being mindful of the risks involved with this business. For instance, we've identified 3 warning signs for BHB Brauholding Bayern-Mitte (1 can't be ignored) you should be aware of.
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.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com
