Agria Group Holding AD (BUL:AGH) Stock Goes Ex-Dividend In Just Four Days

It looks like Agria Group Holding AD (BUL:AGH) is about to go ex-dividend in the next 4 days. The ex-dividend date occurs one day before the record date which is the day on which shareholders need to be on the company's books in order to receive a dividend. It is important to be aware of the ex-dividend date because any trade on the stock needs to have been settled on or before the record date. In other words, investors can purchase Agria Group Holding AD's shares before the 7th of July in order to be eligible for the dividend, which will be paid on the 21st of August.

The company's upcoming dividend is лв1.00 a share, following on from the last 12 months, when the company distributed a total of лв1.00 per share to shareholders. Calculating the last year's worth of payments shows that Agria Group Holding AD has a trailing yield of 4.0% on the current share price of BGN24.8. Dividends are a major contributor to investment returns for long term holders, but only if the dividend continues to be paid. That's why we should always check whether the dividend payments appear sustainable, and if the company is growing.

See our latest analysis for Agria Group Holding AD

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. Agria Group Holding AD paid out just 12% of its profit last year, which we think is conservatively low and leaves plenty of margin for unexpected circumstances. A useful secondary check can be to evaluate whether Agria Group Holding AD generated enough free cash flow to afford its dividend. Agria Group Holding AD paid a dividend despite reporting negative free cash flow over the last twelve months. This may be due to heavy investment in the business, but this is still suboptimal from a dividend sustainability perspective.

Click here to see how much of its profit Agria Group Holding AD paid out over the last 12 months.

Have Earnings And Dividends Been Growing?

Businesses with strong growth prospects usually make the best dividend payers, because it's easier to grow dividends when earnings per share are improving. If earnings fall far enough, the company could be forced to cut its dividend. That's why it's comforting to see Agria Group Holding AD's earnings have been skyrocketing, up 34% per annum for the past five years.

Another key way to measure a company's dividend prospects is by measuring its historical rate of dividend growth. Agria Group Holding AD has delivered an average of 161% per year annual increase in its dividend, based on the past two years of dividend payments. Both per-share earnings and dividends have both been growing rapidly in recent times, which is great to see.

Final Takeaway

Is Agria Group Holding AD an attractive dividend stock, or better left on the shelf? We're glad to see the company has been improving its earnings per share while also paying out a low percentage of income. However, it's not great to see it paying out what we see as an uncomfortably high percentage of its cash flow. Overall, it's hard to get excited about Agria Group Holding AD from a dividend perspective.

While it's tempting to invest in Agria Group Holding AD for the dividends alone, you should always be mindful of the risks involved. We've identified 3 warning signs with Agria Group Holding AD (at least 1 which is a bit concerning), and understanding them should be part of your investment process.

A common investing mistake is buying the first interesting stock you see. Here you can find a full list of high-yield dividend stocks.

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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.