B3 S.A. - Brasil, Bolsa, Balcão (BVMF:B3SA3) Looks Like A Good Stock, And It's Going Ex-Dividend Soon

It looks like B3 S.A. - Brasil, Bolsa, Balcão (BVMF:B3SA3) is about to go ex-dividend in the next couple of days. This means that investors who purchase shares on or after the 1st of July will not receive the dividend, which will be paid on the 7th of August.

B3 - Brasil Bolsa Balcão's upcoming dividend is R$0.12 a share, following on from the last 12 months, when the company distributed a total of R$0.70 per share to shareholders. Calculating the last year's worth of payments shows that B3 - Brasil Bolsa Balcão has a trailing yield of 1.3% on the current share price of R$53.45. 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.

View our latest analysis for B3 - Brasil Bolsa Balcão

If a company pays out more in dividends than it earned, then the dividend might become unsustainable - hardly an ideal situation. B3 - Brasil Bolsa Balcão paid out 66% of its earnings to investors last year, a normal payout level for most businesses.

Companies that pay out less in dividends than they earn in profits generally have more sustainable dividends. The lower the payout ratio, the more wiggle room the business has before it could be forced to cut the dividend.

Click here to see the company's payout ratio, plus analyst estimates of its future dividends.

Have Earnings And Dividends Been Growing?

Stocks in companies that generate sustainable earnings growth often make the best dividend prospects, as it is easier to lift the dividend when earnings are rising. If earnings decline and the company is forced to cut its dividend, investors could watch the value of their investment go up in smoke. That's why it's comforting to see B3 - Brasil Bolsa Balcão's earnings have been skyrocketing, up 23% per annum for 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. B3 - Brasil Bolsa Balcão has delivered an average of 7.2% per year annual increase in its dividend, based on the past ten years of dividend payments. We're glad to see dividends rising alongside earnings over a number of years, which may be a sign the company intends to share the growth with shareholders.

To Sum It Up

From a dividend perspective, should investors buy or avoid B3 - Brasil Bolsa Balcão? Earnings per share are growing nicely, and B3 - Brasil Bolsa Balcão is paying out a percentage of its earnings that is around the average for dividend-paying stocks. Overall, B3 - Brasil Bolsa Balcão looks like a promising dividend stock in this analysis, and we think it would be worth investigating further.

So while B3 - Brasil Bolsa Balcão looks good from a dividend perspective, it's always worthwhile being up to date with the risks involved in this stock. In terms of investment risks, we've identified 1 warning sign with B3 - Brasil Bolsa Balcão and understanding them should be part of your investment process.

A common investment mistake is buying the first interesting stock you see. Here you can find a list of promising dividend stocks with a greater than 2% yield and an upcoming dividend.

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This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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