Only Three Days Left To Cash In On Hypothekarbank Lenzburg's (VTX:HBLN) Dividend

It looks like Hypothekarbank Lenzburg AG (VTX:HBLN) is about to go ex-dividend in the next three days. This means that investors who purchase shares on or after the 23rd of March will not receive the dividend, which will be paid on the 25th of March.

Hypothekarbank Lenzburg's next dividend payment will be CHF110 per share. Last year, in total, the company distributed CHF110 to shareholders. Based on the last year's worth of payments, Hypothekarbank Lenzburg stock has a trailing yield of around 2.5% on the current share price of CHF4360. If you buy this business for its dividend, you should have an idea of whether Hypothekarbank Lenzburg's dividend is reliable and sustainable. So we need to check whether the dividend payments are covered, and if earnings are growing.

Check out our latest analysis for Hypothekarbank Lenzburg

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. That's why it's good to see Hypothekarbank Lenzburg paying out a modest 44% of its earnings.

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

Click here to see how much of its profit Hypothekarbank Lenzburg paid out over the last 12 months.

Have Earnings And Dividends Been Growing?

Companies with falling earnings are riskier for dividend shareholders. If earnings decline and the company is forced to cut its dividend, investors could watch the value of their investment go up in smoke. So we're not too excited that Hypothekarbank Lenzburg's earnings are down 3.2% a year over 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. Hypothekarbank Lenzburg's dividend payments are broadly unchanged compared to where they were 10 years ago. When earnings are declining yet the dividends are flat, typically the company is either paying out a higher portion of its earnings, or paying out of cash or debt on the balance sheet, neither of which is ideal.

Final Takeaway

Has Hypothekarbank Lenzburg got what it takes to maintain its dividend payments? Earnings per share have shrunk noticeably in recent years, although we like that the company has a low payout ratio. This could suggest a cut to the dividend may not be a major risk in the near future. We think there are likely better opportunities out there.

If you want to look further into Hypothekarbank Lenzburg, it's worth knowing the risks this business faces. For example - Hypothekarbank Lenzburg has 1 warning sign we think you should be aware of.

If you're in the market for dividend stocks, we recommend checking our list of top dividend stocks with a greater than 2% yield and an upcoming dividend.

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This article by Simply Wall St is general in nature. 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.
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