Just Two Days Till EVS Broadcast Equipment SA (EBR:EVS) Will Be Trading Ex-Dividend

EVS Broadcast Equipment SA (EBR:EVS) stock is about to trade ex-dividend in two days. The ex-dividend date is one business day 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 of consequence because whenever a stock is bought or sold, the trade takes at least two business day to settle. In other words, investors can purchase EVS Broadcast Equipment's shares before the 24th of November in order to be eligible for the dividend, which will be paid on the 26th of November.

The company's next dividend payment will be €0.35 per share, and in the last 12 months, the company paid a total of €0.50 per share. Based on the last year's worth of payments, EVS Broadcast Equipment has a trailing yield of 2.3% on the current stock price of €22.1. 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 investigate whether EVS Broadcast Equipment can afford its dividend, and if the dividend could grow.

See our latest analysis for EVS Broadcast Equipment

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. That's why it's good to see EVS Broadcast Equipment paying out a modest 34% of its earnings. A useful secondary check can be to evaluate whether EVS Broadcast Equipment generated enough free cash flow to afford its dividend. It distributed 27% of its free cash flow as dividends, a comfortable payout level for most companies.

It's encouraging to see that the dividend is covered by both profit and cash flow. This generally suggests the dividend is sustainable, as long as earnings don't drop precipitously.

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

Have Earnings And Dividends Been Growing?

Companies with falling earnings are riskier for dividend shareholders. If business enters a downturn and the dividend is cut, the company could see its value fall precipitously. That's why it's not ideal to see EVS Broadcast Equipment's earnings per share have been shrinking at 3.7% a year over the previous five years.

The main way most investors will assess a company's dividend prospects is by checking the historical rate of dividend growth. EVS Broadcast Equipment has seen its dividend decline 15% per annum on average over the past 10 years, which is not great to see. While it's not great that earnings and dividends per share have fallen in recent years, we're encouraged by the fact that management has trimmed the dividend rather than risk over-committing the company in a risky attempt to maintain yields to shareholders.

The Bottom Line

Is EVS Broadcast Equipment worth buying for its dividend? EVS Broadcast Equipment has comfortably low cash and profit payout ratios, which may mean the dividend is sustainable even in the face of a sharp decline in earnings per share. Still, we consider declining earnings to be a warning sign. To summarise, EVS Broadcast Equipment looks okay on this analysis, although it doesn't appear a stand-out opportunity.

In light of that, while EVS Broadcast Equipment has an appealing dividend, it's worth knowing the risks involved with this stock. Case in point: We've spotted 1 warning sign for EVS Broadcast Equipment you should be aware of.

We wouldn't recommend just buying the first dividend stock you see, though. Here's a list of interesting dividend stocks with a greater than 2% yield and an upcoming dividend.

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.

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