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 SLOMAN NEPTUN Schiffahrts-Aktiengesellschaft (HMSE:NEP) is about to go ex-dividend in just 4 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. The ex-dividend date is important as the process of settlement involves two full business days. So if you miss that date, you would not show up on the company's books on the record date. This means that investors who purchase SLOMAN NEPTUN Schiffahrts-Aktiengesellschaft's shares on or after the 7th of July will not receive the dividend, which will be paid on the 11th of July.
The company's next dividend payment will be €1.50 per share, on the back of last year when the company paid a total of €1.50 to shareholders. Based on the last year's worth of payments, SLOMAN NEPTUN Schiffahrts-Aktiengesellschaft has a trailing yield of 2.7% on the current stock price of €55. 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! We need to see whether the dividend is covered by earnings and if it's growing.
See our latest analysis for SLOMAN NEPTUN Schiffahrts-Aktiengesellschaft
Dividends are typically paid from company earnings. If a company pays more in dividends than it earned in profit, then the dividend could be unsustainable. SLOMAN NEPTUN Schiffahrts-Aktiengesellschaft paid out just 5.9% of its profit last year, which we think is conservatively low and leaves plenty of margin for unexpected circumstances. That said, even highly profitable companies sometimes might not generate enough cash to pay the dividend, which is why we should always check if the dividend is covered by cash flow. What's good is that dividends were well covered by free cash flow, with the company paying out 2.8% of its cash flow last year.
It's positive to see that SLOMAN NEPTUN Schiffahrts-Aktiengesellschaft's dividend is covered by both profits and cash flow, since this is generally a sign that the dividend is sustainable, and a lower payout ratio usually suggests a greater margin of safety before the dividend gets cut.
Have Earnings And Dividends Been Growing?
Companies with consistently growing earnings per share generally make the best dividend stocks, as they usually find it easier to grow dividends per share. If business enters a downturn and the dividend is cut, the company could see its value fall precipitously. It's encouraging to see SLOMAN NEPTUN Schiffahrts-Aktiengesellschaft has grown its earnings rapidly, up 80% a year for the past five years. With earnings per share growing rapidly and the company sensibly reinvesting almost all of its profits within the business, SLOMAN NEPTUN Schiffahrts-Aktiengesellschaft looks like a promising growth company.