It looks like Evli Pankki Oyj (HEL:EVLI) is about to go ex-dividend in the next 4 days. You will need to purchase shares before the 10th of March to receive the dividend, which will be paid on the 18th of March.
Evli Pankki Oyj’s upcoming dividend is €0.66 a share, following on from the last 12 months, when the company distributed a total of €0.66 per share to shareholders. Looking at the last 12 months of distributions, Evli Pankki Oyj has a trailing yield of approximately 5.4% on its current stock price of €12.3. 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! So we need to check whether the dividend payments are covered, and if earnings are growing.
Dividends are typically paid out of company income, so if a company pays out more than it earned, its dividend is usually at a higher risk of being cut. Evli Pankki Oyj paid out 91% of its earnings, which is more than we’re comfortable with, unless there are mitigating circumstances.
When a company pays out a dividend that is not well covered by profits, the dividend is generally seen as more vulnerable to being 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 earnings fall far enough, the company could be forced to cut its dividend. For this reason, we’re glad to see Evli Pankki Oyj’s earnings per share have risen 19% per annum over the last five years.
The main way most investors will assess a company’s dividend prospects is by checking the historical rate of dividend growth. Since the start of our data, four years ago, Evli Pankki Oyj has lifted its dividend by approximately 21% a year on average. It’s exciting to see that both earnings and dividends per share have grown rapidly over the past few years.
The Bottom Line
Has Evli Pankki Oyj got what it takes to maintain its dividend payments? It’s been growing earnings per share at a pleasant rate, although its dividend payout was not well covered by earnings. In sum this is a middling combination, and we find it hard to get excited about the company from a dividend perspective.
So if you want to do more digging on Evli Pankki Oyj, you’ll find it worthwhile knowing the risks that this stock faces. For example, we’ve found 3 warning signs for Evli Pankki Oyj that we recommend you consider before investing in the business.
If you’re in the market for dividend stocks, we recommend checking our list of top dividend stocks with a greater than 2% yield and an upcoming dividend.
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