Funkwerk AG (FRA:FEW): Ex-Dividend Is In 2 Days, Should You Buy?

Attention dividend hunters! Funkwerk AG (FRA:FEW) will be distributing its dividend of €0.25 per share on the 29 June 2018, and will start trading ex-dividend in 2 days time on the 27 June 2018. What does this mean for current shareholders and potential investors? Below, I will explain how holding Funkwerk can impact your portfolio income stream, by analysing the stock’s most recent financial data and dividend attributes. View out our latest analysis for Funkwerk

5 checks you should do on a dividend stock

When researching a dividend stock, I always follow the following screening criteria:

• Is it the top 25% annual dividend yield payer?

• Does it consistently pay out dividends without missing a payment of significantly cutting payout?

• Has dividend per share amount increased over the past?

• Is its earnings sufficient to payout dividend at the current rate?

• Based on future earnings growth, will it be able to continue to payout dividend at the current rate?

DB:FEW Historical Dividend Yield June 24th 18

How does Funkwerk fare?

Funkwerk has a trailing twelve-month payout ratio of 45.88%, which means that the dividend is covered by earnings. Furthermore, analysts have not forecasted a dividends per share for the future, which makes it hard to determine the yield shareholders should expect, and whether the current payout is sustainable, moving forward.

If there’s one type of stock you want to be reliable, it’s dividend stocks and their stable income-generating ability. Dividend payments from Funkwerk have been volatile in the past 10 years, with some years experiencing significant drops of over 25%. These characteristics do not bode well for income investors seeking reliable stream of dividends.

In terms of its peers, Funkwerk has a yield of 2.12%, which is on the low-side for Communications stocks.

Next Steps:

Now you know to keep in mind the reason why investors should be careful investing in Funkwerk for the dividend. On the other hand, if you are not strictly just a dividend investor, the stock could still be offering some interesting investment opportunities. Given that this is purely a dividend analysis, I urge potential investors to try and get a good understanding of the underlying business and its fundamentals before deciding on an investment. There are three key factors you should look at:

1. Valuation: What is FEW worth today? Even if the stock is a cash cow, it’s not worth an infinite price. The intrinsic value infographic in our free research report helps visualize whether FEW is currently mispriced by the market.

2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Funkwerk’s board and the CEO’s back ground.

3. Dividend Rockstars: Are there better dividend payers with stronger fundamentals out there? Check out our free list of these great stocks here.

To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.

The author is an independent contributor and at the time of publication had no position in the stocks mentioned.