Yahoo Finance Dividend Investors: Don't Be Too Quick To Buy Going Public Media Aktiengesellschaft (ETR:G6P) For Its Upcoming Dividend
It looks like Going Public Media Aktiengesellschaft (ETR:G6P) is about to go ex-dividend in the next 3 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. It is important to be aware of the ex-dividend date because any trade on the stock needs to have been settled on or before the record date. Accordingly, Going Public Media investors that purchase the stock on or after the 25th of June will not receive the dividend, which will be paid on the 27th of June.
The company's upcoming dividend is €0.02 a share, following on from the last 12 months, when the company distributed a total of €0.02 per share to shareholders. Calculating the last year's worth of payments shows that Going Public Media has a trailing yield of 1.2% on the current share price of €1.63. We love seeing companies pay a dividend, but it's also important to be sure that laying the golden eggs isn't going to kill our golden goose! As a result, readers should always check whether Going Public Media has been able to grow its dividends, or if the dividend might be cut.
See our latest analysis for Going Public Media
If a company pays out more in dividends than it earned, then the dividend might become unsustainable - hardly an ideal situation. Last year Going Public Media paid out 91% of its profits as dividends to shareholders, suggesting the dividend is not well covered by earnings.
Click here to see how much of its profit Going Public Media paid out over the last 12 months.
Have Earnings And Dividends Been Growing?
When earnings decline, dividend companies become much harder to analyse and own safely. Investors love dividends, so if earnings fall and the dividend is reduced, expect a stock to be sold off heavily at the same time. Readers will understand then, why we're concerned to see Going Public Media's earnings per share have dropped 14% a year over the past five years. Such a sharp decline casts doubt on the future sustainability of the dividend.
Another key way to measure a company's dividend prospects is by measuring its historical rate of dividend growth. Going Public Media's dividend payments per share have declined at 72% per year on average over the past two years, which is uninspiring. While it's not great that earnings and dividends per share have fallen in recent years, we're encouraged by the fact that management has trimmed the dividend rather than risk over-committing the company in a risky attempt to maintain yields to shareholders.
The Bottom Line
Has Going Public Media got what it takes to maintain its dividend payments? Earnings per share are in decline and Going Public Media is paying out what we feel is an uncomfortably high percentage of its profit as dividends. It's not that we hate the business, but we feel that these characeristics are not desirable for investors seeking a reliable dividend stock to own for the long term. Going Public Media doesn't appear to have a lot going for it, and we're not inclined to take a risk on owning it for the dividend.
With that in mind though, if the poor dividend characteristics of Going Public Media don't faze you, it's worth being mindful of the risks involved with this business. For example, we've found 3 warning signs for Going Public Media (2 are potentially serious!) that deserve your attention before investing in the shares.
If you're in the market for strong dividend payers, we recommend checking our selection of top dividend stocks.
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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.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com
