Regular readers will know that we love our dividends at Simply Wall St, which is why it's exciting to see SM Wirtschaftsberatungs AG (ETR:SMWN) is about to trade ex-dividend in the next 3 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. Thus, you can purchase SM Wirtschaftsberatungs' shares before the 21st of September in order to receive the dividend, which the company will pay on the 25th of September.

The company's upcoming dividend is €0.26 a share, following on from the last 12 months, when the company distributed a total of €0.26 per share to shareholders. Last year's total dividend payments show that SM Wirtschaftsberatungs has a trailing yield of 4.2% on the current share price of €6.25. Dividends are an important source of income to many shareholders, but the health of the business is crucial to maintaining those dividends. That's why we should always check whether the dividend payments appear sustainable, and if the company is growing.

See our latest analysis for SM Wirtschaftsberatungs

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. SM Wirtschaftsberatungs's dividend is not well covered by earnings, as the company lost money last year. This is not a sustainable state of affairs, so it would be worth investigating if earnings are expected to recover.

Click here to see how much of its profit SM Wirtschaftsberatungs 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. Investors love dividends, so if earnings fall and the dividend is reduced, expect a stock to be sold off heavily at the same time. SM Wirtschaftsberatungs was unprofitable last year and, unfortunately, the general trend suggests its earnings have been in decline over the last five years, making us wonder if the dividend is sustainable at all.

Another key way to measure a company's dividend prospects is by measuring its historical rate of dividend growth. In the past 10 years, SM Wirtschaftsberatungs has increased its dividend at approximately 10% a year on average.

Get our latest analysis on SM Wirtschaftsberatungs's balance sheet health here.