Eleven Capital AD (BUL:11C) Looks Interesting, And It's About To Pay A Dividend

Readers hoping to buy Eleven Capital AD (BUL:11C) for its dividend will need to make their move shortly, as the stock is about to trade ex-dividend. 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. 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. In other words, investors can purchase Eleven Capital AD's shares before the 12th of July in order to be eligible for the dividend, which will be paid on the 27th of July.

The company's next dividend payment will be лв0.40 per share, on the back of last year when the company paid a total of лв0.40 to shareholders. Based on the last year's worth of payments, Eleven Capital AD stock has a trailing yield of around 2.0% on the current share price of BGN20.4. If you buy this business for its dividend, you should have an idea of whether Eleven Capital AD's dividend is reliable and sustainable. As a result, readers should always check whether Eleven Capital AD has been able to grow its dividends, or if the dividend might be cut.

Check out our latest analysis for Eleven Capital AD

Dividends are usually paid out of company profits, so if a company pays out more than it earned then its dividend is usually at greater risk of being cut. Eleven Capital AD paid out just 6.6% of its profit last year, which we think is conservatively low and leaves plenty of margin for unexpected circumstances.

Generally speaking, the lower a company's payout ratios, the more resilient its dividend usually is.

Click here to see how much of its profit Eleven Capital 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. It's encouraging to see Eleven Capital AD has grown its earnings rapidly, up 76% a year for the past five years.

Given that Eleven Capital AD has only been paying a dividend for a year, there's not much of a past history to draw insight from.

To Sum It Up

Is Eleven Capital AD worth buying for its dividend? When companies are growing rapidly and retaining a majority of the profits within the business, it's usually a sign that reinvesting earnings creates more value than paying dividends to shareholders. This strategy can add significant value to shareholders over the long term - as long as it's done without issuing too many new shares. In summary, Eleven Capital AD appears to have some promise as a dividend stock, and we'd suggest taking a closer look at it.

In light of that, while Eleven Capital AD has an appealing dividend, it's worth knowing the risks involved with this stock. In terms of investment risks, we've identified 2 warning signs with Eleven Capital AD and understanding them should be part of your investment process.

Generally, we wouldn't recommend just buying the first dividend stock you see. Here's a curated list of interesting stocks that are strong dividend payers.

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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.