Why You Might Be Interested In Hydraulic Elements and Systems AD (BUL:HES) For Its Upcoming 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 Hydraulic Elements and Systems AD (BUL:HES) is about to go ex-dividend in just 4 days. 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. 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 Hydraulic Elements and Systems AD's shares before the 12th of June in order to be eligible for the dividend, which will be paid on the 20th of July.

The company's next dividend payment will be лв0.33 per share, on the back of last year when the company paid a total of лв0.33 to shareholders. Based on the last year's worth of payments, Hydraulic Elements and Systems AD has a trailing yield of 4.8% on the current stock price of BGN6.85. 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.

Check out our latest analysis for Hydraulic Elements and Systems AD

If a company pays out more in dividends than it earned, then the dividend might become unsustainable - hardly an ideal situation. Hydraulic Elements and Systems AD paid out 69% of its earnings to investors last year, a normal payout level for most businesses. That said, even highly profitable companies sometimes might not generate enough cash to pay the dividend, which is why we should always check if the dividend is covered by cash flow.

Click here to see how much of its profit Hydraulic Elements and Systems AD paid out over the last 12 months.

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 Hydraulic Elements and Systems AD's earnings per share have risen 14% per annum over the last five years.

Many investors will assess a company's dividend performance by evaluating how much the dividend payments have changed over time. Hydraulic Elements and Systems AD has delivered an average of 23% per year annual increase in its dividend, based on the past 10 years of dividend payments. It's great to see earnings per share growing rapidly over several years, and dividends per share growing right along with it.

To Sum It Up

Is Hydraulic Elements and Systems AD worth buying for its dividend? Earnings per share growth is a positive, and the company's payout ratio looks normal. However, we note Hydraulic Elements and Systems AD paid out a much higher percentage of its free cash flow, which makes us uncomfortable. In summary, it's hard to get excited about Hydraulic Elements and Systems AD from a dividend perspective.

If you want to look further into Hydraulic Elements and Systems AD, it's worth knowing the risks this business faces. To help with this, we've discovered 3 warning signs for Hydraulic Elements and Systems AD (1 is a bit concerning!) that you ought to be aware of before buying the shares.

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.