Here's What We Like About ITF Group AD's (BUL:ITF) Upcoming Dividend

Readers hoping to buy ITF Group AD (BUL:ITF) for its dividend will need to make their move shortly, as the stock is about to trade ex-dividend. The ex-dividend date is commonly two business days 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 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. Accordingly, ITF Group AD investors that purchase the stock on or after the 8th of July will not receive the dividend, which will be paid on the 1st of January.

The company's next dividend payment will be лв0.342857 per share, on the back of last year when the company paid a total of лв0.34 to shareholders. Last year's total dividend payments show that ITF Group AD has a trailing yield of 5.9% on the current share price of лв5.85. 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! As a result, readers should always check whether ITF Group AD has been able to grow its dividends, or if the dividend might be cut.

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If a company pays out more in dividends than it earned, then the dividend might become unsustainable - hardly an ideal situation. Fortunately ITF Group AD's payout ratio is modest, at just 28% of profit. ITF Group 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.

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

View our latest analysis for ITF Group AD

Click here to see how much of its profit ITF Group AD 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 business enters a downturn and the dividend is cut, the company could see its value fall precipitously. That's why it's comforting to see ITF Group AD's earnings have been skyrocketing, up 40% per annum for the past five years.

Unfortunately ITF Group AD has only been paying a dividend for a year or so, so there's not much of a history to draw insight from.

The Bottom Line

Has ITF Group AD got what it takes to maintain its dividend payments? Typically, companies that are growing rapidly and paying out a low fraction of earnings are keeping the profits for reinvestment in the business. This is one of the most attractive investment combinations under this analysis, as it can create substantial value for investors over the long run. Overall, ITF Group AD looks like a promising dividend stock in this analysis, and we think it would be worth investigating further.

In light of that, while ITF Group AD has an appealing dividend, it's worth knowing the risks involved with this stock. For instance, we've identified 5 warning signs for ITF Group AD (3 are concerning) you should be aware of.

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.