Stock Analysis

Why You Might Be Interested In Banestes S.A - Banco do Estado do Espírito Santo (BVMF:BEES3) For Its Upcoming Dividend

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BOVESPA:BEES3
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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 Banestes S.A - Banco do Estado do Espírito Santo (BVMF:BEES3) 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 important because any transaction on a stock needs to have been settled before the record date in order to be eligible for a dividend. Accordingly, Banestes - Banco do Estado do Espírito Santo investors that purchase the stock on or after the 1st of December will not receive the dividend, which will be paid on the 2nd of January.

The company's next dividend payment will be R$0.017 per share, and in the last 12 months, the company paid a total of R$0.45 per share. Last year's total dividend payments show that Banestes - Banco do Estado do Espírito Santo has a trailing yield of 7.7% on the current share price of R$5.78. Dividends are a major contributor to investment returns for long term holders, but only if the dividend continues to be paid. So we need to check whether the dividend payments are covered, and if earnings are growing.

Our analysis indicates that BEES3 is potentially undervalued!

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. Banestes - Banco do Estado do Espírito Santo is paying out an acceptable 51% of its profit, a common payout level among most companies. Banestes - Banco do Estado do Espírito Santo paid a dividend despite reporting negative free cash flow last year. That's typically a bad combination and - if this were more than a one-off - not sustainable.

When a company paid out less in dividends than it earned in profit, this generally suggests its dividend is affordable. The lower the % of its profit that it pays out, the greater the margin of safety for the dividend if the business enters a downturn.

Click here to see how much of its profit Banestes - Banco do Estado do Espírito Santo paid out over the last 12 months.

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BOVESPA:BEES3 Historic Dividend November 26th 2022

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 business enters a downturn and the dividend is cut, the company could see its value fall precipitously. 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.

The main way most investors will assess a company's dividend prospects is by checking the historical rate of dividend growth. In the last 10 years, Banestes - Banco do Estado do Espírito Santo has lifted its dividend by approximately 11% a year on average. Both per-share earnings and dividends have both been growing rapidly in recent times, which is great to see.

Final Takeaway

Is Banestes - Banco do Estado do Espírito Santo an attractive dividend stock, or better left on the shelf? Banestes - Banco do Estado do Espírito Santo has an acceptable payout ratio and its earnings per share have been improving at a decent rate. Banestes - Banco do Estado do Espírito Santo ticks a lot of boxes for us from a dividend perspective, and we think these characteristics should mark the company as deserving of further attention.

While it's tempting to invest in Banestes - Banco do Estado do Espírito Santo for the dividends alone, you should always be mindful of the risks involved. Every company has risks, and we've spotted 1 warning sign for Banestes - Banco do Estado do Espírito Santo you should know about.

A common investing mistake is buying the first interesting stock you see. Here you can find a full list of high-yield 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.

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