Be Sure To Check Out Elhim-Iskra JSC (BUL:ELHM) Before It Goes Ex-Dividend

Readers hoping to buy Elhim-Iskra JSC (BUL:ELHM) for its dividend will need to make their move shortly, as the stock is about to trade ex-dividend. The ex-dividend date is usually set to be one business day before the record date which is the cut-off date on which you must be present on the company's books as a shareholder in order to receive the 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. Accordingly, Elhim-Iskra JSC investors that purchase the stock on or after the 28th of June will not receive the dividend, which will be paid on the 10th of August.

The company's upcoming dividend is лв0.02 a share, following on from the last 12 months, when the company distributed a total of лв0.02 per share to shareholders. Based on the last year's worth of payments, Elhim-Iskra JSC stock has a trailing yield of around 2.0% on the current share price of BGN1. 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! That's why we should always check whether the dividend payments appear sustainable, and if the company is growing.

See our latest analysis for Elhim-Iskra JSC

Dividends are typically paid from company earnings. If a company pays more in dividends than it earned in profit, then the dividend could be unsustainable. Fortunately Elhim-Iskra JSC's payout ratio is modest, at just 46% of profit. A useful secondary check can be to evaluate whether Elhim-Iskra JSC generated enough free cash flow to afford its dividend.

Click here to see how much of its profit Elhim-Iskra JSC paid out over the last 12 months.

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 Elhim-Iskra JSC's earnings have been skyrocketing, up 25% per annum for the past five years.

Many investors will assess a company's dividend performance by evaluating how much the dividend payments have changed over time. Elhim-Iskra JSC's dividend payments are broadly unchanged compared to where they were 10 years ago.

To Sum It Up

Has Elhim-Iskra JSC got what it takes to maintain its dividend payments? We like that Elhim-Iskra JSC has been successfully growing its earnings per share at a nice rate and reinvesting most of its profits in the business. However, we note the high cashflow payout ratio with some concern. In summary, while it has some positive characteristics, we're not inclined to race out and buy Elhim-Iskra JSC today.

With that in mind, a critical part of thorough stock research is being aware of any risks that stock currently faces. For example, Elhim-Iskra JSC has 4 warning signs (and 2 which can't be ignored) we think you should know about.

If you're in the market for strong dividend payers, we recommend checking our selection of top 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.