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Some investors rely on dividends for growing their wealth, and if you're one of those dividend sleuths, you might be intrigued to know that Dierig Holding AG (ETR:DIE) is about to go ex-dividend in just four days. The ex-dividend date is one business day before a company's record date, which is the date on which the company determines which shareholders are entitled to receive a 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. This means that investors who purchase Dierig Holding's shares on or after the 24th of May will not receive the dividend, which will be paid on the 26th of May.
The company's next dividend payment will be €0.20 per share, and in the last 12 months, the company paid a total of €0.20 per share. Based on the last year's worth of payments, Dierig Holding has a trailing yield of 1.7% on the current stock price of €12.1. Dividends are a major contributor to investment returns for long term holders, but only if the dividend continues to be paid. As a result, readers should always check whether Dierig Holding has been able to grow its dividends, or if the dividend might be cut.
See our latest analysis for Dierig Holding
If a company pays out more in dividends than it earned, then the dividend might become unsustainable - hardly an ideal situation. That's why it's good to see Dierig Holding paying out a modest 27% of its earnings. A useful secondary check can be to evaluate whether Dierig Holding generated enough free cash flow to afford its dividend. Dierig Holding paid a dividend despite reporting negative free cash flow over the last twelve months. This may be due to heavy investment in the business, but this is still suboptimal from a dividend sustainability perspective.
Click here to see how much of its profit Dierig Holding 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. Investors love dividends, so if earnings fall and the dividend is reduced, expect a stock to be sold off heavily at the same time. With that in mind, we're encouraged by the steady growth at Dierig Holding, with earnings per share up 3.8% on average over the last five years.
Many investors will assess a company's dividend performance by evaluating how much the dividend payments have changed over time. Dierig Holding's dividend payments are broadly unchanged compared to where they were nine years ago.