Just Three Days Till Schoeller-Bleckmann Oilfield Equipment Aktiengesellschaft (VIE:SBO) Will Be Trading Ex-Dividend

Some investors rely on dividends for growing their wealth, and if you're one of those dividend sleuths, you might be intrigued to know that Schoeller-Bleckmann Oilfield Equipment Aktiengesellschaft (VIE:SBO) is about to go ex-dividend in just three days. The ex-dividend date is commonly two business days before the record date, which is the cut-off date for shareholders to be present on the company's books to be eligible for a dividend payment. The ex-dividend date is an important date to be aware of as any purchase of the stock made on or after this date might mean a late settlement that doesn't show on the record date. Therefore, if you purchase Schoeller-Bleckmann Oilfield Equipment's shares on or after the 8th of May, you won't be eligible to receive the dividend, when it is paid on the 15th of May.

The company's next dividend payment will be €1.75 per share. Last year, in total, the company distributed €1.75 to shareholders. Calculating the last year's worth of payments shows that Schoeller-Bleckmann Oilfield Equipment has a trailing yield of 5.5% on the current share price of €31.95. 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.

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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. Schoeller-Bleckmann Oilfield Equipment paid out more than half (61%) of its earnings last year, which is a regular payout ratio for most companies. Yet cash flow is typically more important than profit for assessing dividend sustainability, so we should always check if the company generated enough cash to afford its dividend. Fortunately, it paid out only 49% of its free cash flow in the past year.

It's positive to see that Schoeller-Bleckmann Oilfield Equipment'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.

See our latest analysis for Schoeller-Bleckmann Oilfield Equipment

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

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 decline and the company is forced to cut its dividend, investors could watch the value of their investment go up in smoke. This is why it's a relief to see Schoeller-Bleckmann Oilfield Equipment earnings per share are up 7.3% per annum over the last five years. Decent historical earnings per share growth suggests Schoeller-Bleckmann Oilfield Equipment has been effectively growing value for shareholders. However, it's now paying out more than half its earnings as dividends. Therefore it's unlikely that the company will be able to reinvest heavily in its business, which could presage slower growth in the future.

The main way most investors will assess a company's dividend prospects is by checking the historical rate of dividend growth. In the past 10 years, Schoeller-Bleckmann Oilfield Equipment has increased its dividend at approximately 1.6% a year on average.

The Bottom Line

Should investors buy Schoeller-Bleckmann Oilfield Equipment for the upcoming dividend? While earnings per share growth has been modest, Schoeller-Bleckmann Oilfield Equipment's dividend payouts are around an average level; without a sharp change in earnings we feel that the dividend is likely somewhat sustainable. Pleasingly the company paid out a conservatively low percentage of its free cash flow. To summarise, Schoeller-Bleckmann Oilfield Equipment looks okay on this analysis, although it doesn't appear a stand-out opportunity.

In light of that, while Schoeller-Bleckmann Oilfield Equipment has an appealing dividend, it's worth knowing the risks involved with this stock. To help with this, we've discovered 2 warning signs for Schoeller-Bleckmann Oilfield Equipment that you should be aware of before investing in their shares.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.