Banestes - Banco do Estado do Espírito Santo (BVMF:BEES3) Could Be A Buy For Its Upcoming Dividend
Readers hoping to buy Banestes S.A - Banco do Estado do Espírito Santo (BVMF:BEES3) for its dividend will need to make their move shortly, as the stock is about to trade ex-dividend. The ex-dividend date is one business day 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 of consequence because whenever a stock is bought or sold, the trade takes at least two business day to settle. Accordingly, Banestes - Banco do Estado do Espírito Santo investors that purchase the stock on or after the 3rd of April will not receive the dividend, which will be paid on the 2nd of May.
The company's next dividend payment will be R$0.019 per share, on the back of last year when the company paid a total of R$0.45 to shareholders. Based on the last year's worth of payments, Banestes - Banco do Estado do Espírito Santo stock has a trailing yield of around 7.1% on the current share price of R$6.29. Dividends are an important source of income to many shareholders, but the health of the business is crucial to maintaining those dividends. That's why we should always check whether the dividend payments appear sustainable, and if the company is growing.
View our latest analysis for Banestes - Banco do Estado do Espírito Santo
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. Banestes - Banco do Estado do Espírito Santo is paying out an acceptable 53% of its profit, a common payout level among most companies.
Companies that pay out less in dividends than they earn in profits generally have more sustainable dividends. The lower the payout ratio, the more wiggle room the business has before it could be forced to cut the dividend.
Click here to see how much of its profit Banestes - Banco do Estado do Espírito Santo 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 Banestes - Banco do Estado do Espírito Santo's earnings per share have risen 15% per annum over the last five years.
Another key way to measure a company's dividend prospects is by measuring its historical rate of dividend growth. In the past 10 years, Banestes - Banco do Estado do Espírito Santo has increased its dividend at approximately 10% a year on average. 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 Banestes - Banco do Estado do Espírito Santo worth buying for its dividend? Banestes - Banco do Estado do Espírito Santo has an acceptable payout ratio and its earnings per share have been improving at a decent rate. In summary, Banestes - Banco do Estado do Espírito Santo appears to have some promise as a dividend stock, and we'd suggest taking a closer look at it.
In light of that, while Banestes - Banco do Estado do Espírito Santo has an appealing dividend, it's worth knowing the risks involved with this stock. In terms of investment risks, we've identified 1 warning sign with Banestes - Banco do Estado do Espírito Santo and understanding them should be part of your investment process.
If you're in the market for strong dividend payers, we recommend checking our selection of top dividend stocks.
Valuation is complex, but we're helping make it simple.
Find out whether Banestes - Banco do Estado do Espírito Santo is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.View the Free Analysis
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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.
Banestes - Banco do Estado do Espírito Santo
Banestes S.A - Banco do Estado do Espírito Santo S.A.
Solid track record with excellent balance sheet.