Regular readers will know we love our dividends at Simply Wall St, which is why it’s exciting to see Brüder Mannesmann Aktiengesellschaft (FRA:BMM) is set to trade ex-dividend in the next 4 days. The ex-dividend date occurs one day before the record date which is the day shareholders must be on the books of the company to receive a dividend. The ex-dividend date is an important date to know because any purchase of shares made on or after this date may mean late settlement that does not appear on the record date. As a result, Brüder Mannesmann investors who buy the stock on or after June 27 will not receive the dividend, which will be paid on June 29.
The company’s next dividend payment will be €0.04 per share, after last year when the company paid a total of €0.04 to shareholders. Last year’s total dividend payouts show that Brüder Mannesmann has a rolling yield of 2.4% on the current share price of €1.7. If you’re buying this company for its dividend, you should have some idea of the reliability and sustainability of Brüder Mannesmann’s dividend. That’s why we always have to check if the dividend payouts seem sustainable and if the business is growing.
See our latest analysis for Brüder Mannesmann
If a company pays out more dividends than it has earned, the dividend may become unsustainable – a less than ideal situation. Brüder Mannesmann has a low and conservative payout ratio of just 14% of its after-tax income. Still, cash flow is usually more important than earnings in assessing the sustainability of dividends, so we always need to check whether the company has generated enough cash to pay its dividend.
Click here to see how much profit Brüder Mannesmann has paid out over the past 12 months.
Have earnings and dividends increased?
Companies with strong growth prospects are generally the best dividend payers because it is easier to increase dividends when earnings per share improve. Investors love dividends, so if earnings fall and the dividend is cut, expect a stock to sell heavily at the same time. That’s why it’s heartening to see Brüder Mannesmann’s revenue skyrocketing, up 38% annually over the past five years.
Given that Brüder Mannesmann has only been paying a dividend for a year, there is not much history to rely on.
Is Brüder Mannesmann an attractive dividend stock, or is it better left on the shelf? We are happy to see that the company improved its earnings per share while paying out a low percentage of income. However, it’s not great to see him pay what we consider an uncomfortably high percentage of his cash flow. All in all, not a bad combination, but we believe there are probably more attractive dividend prospects.
So while Brüder Mannesmann looks good from a dividend perspective, it’s still worth being aware of the risks of this stock. For example, we have identified 3 warning signs for Brüder Mannesmann (2 are a little nasty) you should be aware of.
If you are looking for good dividend payers, we recommend by consulting our selection of the best dividend-paying stocks.
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This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts only using unbiased methodology and our articles are not intended to be financial advice. It is not a recommendation to buy or sell stocks and does not take into account your objectives or financial situation. Our goal is to bring you targeted long-term analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price-sensitive companies or qualitative materials. Simply Wall St has no position in the stocks mentioned.