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Thule Group AB (released) (STO: THULE) is set to trade ex-dividend within the next three days. The ex-dividend date is one working day before the registration date, which is the deadline by which shareholders must be present on the books of the company to be eligible for a dividend payment. The ex-dividend date is important because the settlement process involves two full business days. So if you miss this date, you will not appear on the company books on the date of registration. Therefore, if you buy Thule Group shares on or after October 1, you will not be able to receive the dividend when it is paid on October 7.
The next dividend payment of the company will be 4.00 kr per share. Last year, in total, the company distributed 8.00 crowns to shareholders. Last year’s total dividend payments show Thule Group has a 1.7% return on the current share price of SEK 472. We love to see companies pay a dividend, but it’s also important to make sure that laying the golden eggs doesn’t kill our goose that lays the golden eggs! So we need to determine whether Thule Group can afford its dividend and whether the dividend could increase.
See our latest analysis for Thule Group
If a company pays more dividends than it has earned, then the dividend could become unsustainable – which is not an ideal situation. Fortunately, Thule Group’s payout ratio is modest, at just 48% of profits. Yet cash flow is usually more important than earnings in assessing dividend sustainability, so we always need to check whether the company has generated enough cash to pay its dividend. It has paid out more than half (71%) of its free cash flow in the past year, which is within an average range for most companies.
It is positive to see that Thule Group’s dividend is covered by both earnings and cash flow, as this is usually a sign that the dividend is sustainable, and a lower payout ratio usually suggests a larger margin. security before the dividend is cut.
Click here to view the company’s payout ratio, as well as analysts’ estimates of its future dividends.
Have profits and dividends increased?
Stocks of companies that generate sustainable earnings growth often offer the best dividend prospects because it’s easier to raise the dividend when earnings rise. If profits fall and the company is forced to cut its dividend, investors could see the value of their investment go up in smoke. It is encouraging to see that Thule Group has grown its profits rapidly, increasing 23% per year over the past five years.
Another key way to measure a company’s dividend outlook is to measure its historical rate of dividend growth. Since our data began seven years ago, Thule Group has increased its dividend by around 22% per year on average. Both earnings per share and dividends have been rising rapidly lately, which is great to see.
Last takeaways
Should investors buy Thule Group for the next dividend? Earnings per share have been growing at a good pace lately and over the past year Thule Group has paid out less than half of its earnings and just over half of its free cash flow. It is a promising combination that should mark this company worthy of further attention.
With this in mind, an essential part of in-depth stock research is being aware of the risks stocks currently face. For example – Thule Group has 1 warning sign we think you should be aware.
However, we don’t recommend simply buying the first dividend stock you see. Here is a list of interesting dividend paying stocks with a yield above 2% and a dividend coming soon.
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This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts using only unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell shares and does not take into account your goals or your financial situation. Our aim is to bring you long-term, targeted analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price sensitive companies or qualitative material. Simply Wall St has no position in the mentioned stocks.
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