Allgeier SE (ETR: AEIN) is set to trade ex-dividend within the next 4 days. The ex-dividend date is generally set at one working day before the registration date which is the deadline by which you must be present in the books of the company as a shareholder to receive the dividend. The ex-dividend date is important because any share transaction must have been settled before the registration date to be eligible for a dividend. Therefore, if you buy Allgeier shares on or after June 9, you will not be able to receive the dividend when it is paid on June 11.
The company’s next dividend will be € 0.50 per share, and over the past 12 months the company has paid a total of € 0.50 per share. Based on the value of last year’s payouts, the Allgeier share has a rolling yield of around 2.2% on the current share price of € 23.2. If you are buying this company for its dividend, you should know if Allgeier’s dividend is reliable and sustainable. That is why we should always check whether dividend payments seem sustainable and whether the business is growing.
See our latest analysis for Allgeier
If a company pays more dividends than it has earned, then the dividend could become unsustainable – which is not an ideal situation. Allgeier last year distributed an unsustainable amount of 199% of its profits in the form of dividends to shareholders. Without a more sustainable payment behavior, the dividend seems precarious. Still, 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. Fortunately, he only paid 8.0% of his free cash flow last year.
It is disappointing that the dividend was not covered by earnings, but cash is more important from a dividend sustainability perspective, and Allgeier has fortunately generated enough cash to fund its dividend. Yet if the company repeatedly paid a dividend greater than its profits, we would be concerned. Very few companies are able to sustainably pay dividends greater than their declared profits.
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 enough, the company could be forced to cut its dividend. For this reason, we are pleased to see that Allgeier’s earnings per share have grown 12% 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. Allgeier’s dividend payouts are actually stable from where they were three years ago.
Is Allgeier worth buying for its dividend? It’s good to see the earnings per share rise and the low cash flow payout ratio, although we are not comfortable with Allgeier paying such a high percentage of its earnings. Although there are good things to do, we are a bit ambivalent and it would take more to convince us of the merits of the Allgeier dividend.
On that note, you’ll want to research the risks Allgeier faces. To help you, we have discovered 1 warning sign for Allgeier which you should know before investing in their stocks.
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. 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 any of the stocks mentioned.
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