B3 S.A. - Brasil, Bolsa, Balcão (BVMF:B3SA3) Looks Like A Good Stock, And It's Going Ex-Dividend Soon

Regular readers will know that we love our dividends at Simply Wall St, which is why it's exciting to see B3 S.A. - Brasil, Bolsa, Balcão (BVMF:B3SA3) is about to trade ex-dividend in the next four days. Typically, the ex-dividend date is one business day before the record date which is the date on which a company determines the shareholders eligible to receive a 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. In other words, investors can purchase B3 - Brasil Bolsa Balcão's shares before the 2nd of January in order to be eligible for the dividend, which will be paid on the 8th of January.

The company's next dividend payment will be R$0.092 per share. Last year, in total, the company distributed R$0.57 to shareholders. Last year's total dividend payments show that B3 - Brasil Bolsa Balcão has a trailing yield of 3.9% on the current share price of R$14.58. Dividends are an important source of income to many shareholders, but the health of the business is crucial to maintaining those dividends. So we need to investigate whether B3 - Brasil Bolsa Balcão can afford its dividend, and if the dividend could grow.

Check out our latest analysis for B3 - Brasil Bolsa Balcão

Dividends are typically paid out of company income, so if a company pays out more than it earned, its dividend is usually at a higher risk of being cut. B3 - Brasil Bolsa Balcão paid out 64% of its earnings to investors last year, a normal payout level for most businesses.

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 the company's payout ratio, plus analyst estimates of its future dividends.

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. That's why it's comforting to see B3 - Brasil Bolsa Balcão's earnings have been skyrocketing, up 28% per annum for the past 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 past 10 years, B3 - Brasil Bolsa Balcão has increased its dividend at approximately 12% 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

From a dividend perspective, should investors buy or avoid B3 - Brasil Bolsa Balcão? B3 - Brasil Bolsa Balcão has an acceptable payout ratio and its earnings per share have been improving at a decent rate. Overall, B3 - Brasil Bolsa Balcão looks like a promising dividend stock in this analysis, and we think it would be worth investigating further.

While it's tempting to invest in B3 - Brasil Bolsa Balcão for the dividends alone, you should always be mindful of the risks involved. For example - B3 - Brasil Bolsa Balcão has 1 warning sign we think you should be aware of.

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.