In This Article:
WASGAU Produktions & Handels AG (FRA:MSH) is about to trade ex-dividend in the next four days. The ex-dividend date occurs one day before the record date which is the day on which shareholders need to be on the company's books in order to receive a dividend. 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 WASGAU Produktions & Handels' shares on or after the 7th of June will not receive the dividend, which will be paid on the 11th of June.
The company's next dividend payment will be €0.12 per share. Last year, in total, the company distributed €0.12 to shareholders. Calculating the last year's worth of payments shows that WASGAU Produktions & Handels has a trailing yield of 1.2% on the current share price of €10.00. If you buy this business for its dividend, you should have an idea of whether WASGAU Produktions & Handels's dividend is reliable and sustainable. That's why we should always check whether the dividend payments appear sustainable, and if the company is growing.
Check out our latest analysis for WASGAU Produktions & Handels
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. WASGAU Produktions & Handels has a low and conservative payout ratio of just 18% of its income after tax. 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. It paid out 2.8% of its free cash flow as dividends last year, which is conservatively low.
It's positive to see that WASGAU Produktions & Handels'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.
Click here to see how much of its profit WASGAU Produktions & Handels paid out over the last 12 months.
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. Investors love dividends, so if earnings fall and the dividend is reduced, expect a stock to be sold off heavily at the same time. This is why it's a relief to see WASGAU Produktions & Handels earnings per share are up 6.8% per annum over the last five years. Earnings per share have been increasing steadily and management is reinvesting almost all of the profits back into the business. If profits are reinvested effectively, this could be a bullish combination for future earnings and dividends.