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

It looks like Banestes S.A - Banco do Estado do Espírito Santo (BVMF:BEES3) is about to go ex-dividend in the next 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. It is important to be aware of the ex-dividend date because any trade on the stock needs to have been settled on or before the record date. This means that investors who purchase Banestes - Banco do Estado do Espírito Santo's shares on or after the 2nd of February will not receive the dividend, which will be paid on the 1st of March.

The company's next dividend payment will be R$0.0193724 per share, on the back of last year when the company paid a total of R$0.45 to shareholders. Looking at the last 12 months of distributions, Banestes - Banco do Estado do Espírito Santo has a trailing yield of approximately 4.6% on its current stock price of R$9.65. Dividends are a major contributor to investment returns for long term holders, but only if the dividend continues to be paid. That's why we should always check whether the dividend payments appear sustainable, and if the company is growing.

Check out our latest analysis for Banestes - Banco do Estado do Espírito Santo

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 paid out 59% of its earnings to investors last year, a normal payout level for most businesses.

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.

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 14% 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. Banestes - Banco do Estado do Espírito Santo has delivered an average of 11% per year annual increase in its dividend, based on the past 10 years of dividend payments. It's exciting to see that both earnings and dividends per share have grown rapidly over the past few years.

To Sum It Up

Is Banestes - Banco do Estado do Espírito Santo worth buying for its dividend? Earnings per share are growing nicely, and Banestes - Banco do Estado do Espírito Santo is paying out a percentage of its earnings that is around the average for dividend-paying stocks. Overall, Banestes - Banco do Estado do Espírito Santo looks like a promising dividend stock in this analysis, and we think it would be worth investigating further.

With that in mind, a critical part of thorough stock research is being aware of any risks that stock currently faces. Our analysis shows 1 warning sign for Banestes - Banco do Estado do Espírito Santo and you should be aware of this before buying any 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.