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Regular readers will know that we love our dividends at Simply Wall St, which is why it's exciting to see RHÖN-KLINIKUM Aktiengesellschaft (ETR:RHK) is about to trade ex-dividend in the next three days. The ex-dividend date is one business day before the record date, which is the cut-off date for shareholders to be present on the company's books to be eligible for a dividend payment. 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. Meaning, you will need to purchase RHÖN-KLINIKUM's shares before the 8th of June to receive the dividend, which will be paid on the 13th of June.
The company's next dividend payment will be €0.15 per share, and in the last 12 months, the company paid a total of €0.15 per share. Looking at the last 12 months of distributions, RHÖN-KLINIKUM has a trailing yield of approximately 1.1% on its current stock price of €13.2. Dividends are a major contributor to investment returns for long term holders, but only if the dividend continues to be paid. We need to see whether the dividend is covered by earnings and if it's growing.
See our latest analysis for RHÖN-KLINIKUM
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. RHÖN-KLINIKUM paid out a comfortable 29% of its profit last year. RHÖN-KLINIKUM 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 RHÖN-KLINIKUM paid out over the last 12 months.
Have Earnings And Dividends Been Growing?
When earnings decline, dividend companies become much harder to analyse and own safely. If earnings decline and the company is forced to cut its dividend, investors could watch the value of their investment go up in smoke. So we're not too excited that RHÖN-KLINIKUM's earnings are down 2.9% a year over the past five years.
The main way most investors will assess a company's dividend prospects is by checking the historical rate of dividend growth. RHÖN-KLINIKUM has seen its dividend decline 10% per annum on average over the past 10 years, which is not great to see. It's never nice to see earnings and dividends falling, but at least management has cut the dividend rather than potentially risk the company's health in an attempt to maintain it.