Gesundheitswelt Chiemgau AG (MUN:JTH) Passed Our Checks, And It's About To Pay A €0.54 Dividend
Regular readers will know that we love our dividends at Simply Wall St, which is why it's exciting to see Gesundheitswelt Chiemgau AG (MUN:JTH) is about to trade ex-dividend in the next three days. Typically, the ex-dividend date is one business day before the record date which is the date on which a company determines the shareholders eligible to receive a dividend. The ex-dividend date is an important date to be aware of as any purchase of the stock made on or after this date might mean a late settlement that doesn't show on the record date. In other words, investors can purchase Gesundheitswelt Chiemgau's shares before the 18th of July in order to be eligible for the dividend, which will be paid on the 22nd of July.
The company's next dividend payment will be €0.54 per share, and in the last 12 months, the company paid a total of €0.54 per share. Looking at the last 12 months of distributions, Gesundheitswelt Chiemgau has a trailing yield of approximately 4.2% on its current stock price of €13.00. 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! So we need to investigate whether Gesundheitswelt Chiemgau can afford its dividend, and if the dividend could grow.
Check out our latest analysis for Gesundheitswelt Chiemgau
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. Fortunately Gesundheitswelt Chiemgau's payout ratio is modest, at just 30% of profit. Yet cash flow is typically more important than profit for assessing dividend sustainability, so we should always check if the company generated enough cash to afford its dividend. Luckily it paid out just 8.0% of its free cash flow last year.
It's encouraging to see that the dividend is covered by both profit and cash flow. This generally suggests the dividend is sustainable, as long as earnings don't drop precipitously.
Click here to see how much of its profit Gesundheitswelt Chiemgau paid out over the last 12 months.
Have Earnings And Dividends Been Growing?
Businesses with strong growth prospects usually make the best dividend payers, because it's easier to grow dividends when earnings per share are improving. If earnings decline and the company is forced to cut its dividend, investors could watch the value of their investment go up in smoke. This is why it's a relief to see Gesundheitswelt Chiemgau earnings per share are up 5.9% per annum over the last five years. Management have been reinvested more than half of the company's earnings within the business, and the company has been able to grow earnings with this retained capital. We think this is generally an attractive combination, as dividends can grow through a combination of earnings growth and or a higher payout ratio over time.
Another key way to measure a company's dividend prospects is by measuring its historical rate of dividend growth. Since the start of our data, six years ago, Gesundheitswelt Chiemgau has lifted its dividend by approximately 54% a year on average. We're glad to see dividends rising alongside earnings over a number of years, which may be a sign the company intends to share the growth with shareholders.
The Bottom Line
Should investors buy Gesundheitswelt Chiemgau for the upcoming dividend? Earnings per share have been growing moderately, and Gesundheitswelt Chiemgau is paying out less than half its earnings and cash flow as dividends, which is an attractive combination as it suggests the company is investing in growth. We would prefer to see earnings growing faster, but the best dividend stocks over the long term typically combine significant earnings per share growth with a low payout ratio, and Gesundheitswelt Chiemgau is halfway there. Gesundheitswelt Chiemgau looks solid on this analysis overall, and we'd definitely consider investigating it more closely.
So while Gesundheitswelt Chiemgau looks good from a dividend perspective, it's always worthwhile being up to date with the risks involved in this stock. To help with this, we've discovered 4 warning signs for Gesundheitswelt Chiemgau that you should be aware of before investing in their 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