Dividend Investors: Don't Be Too Quick To Buy nebag ag (VTX:NBEN) For Its Upcoming Dividend

nebag ag (VTX:NBEN) is about to trade ex-dividend in the next three days. Typically, the ex-dividend date is two business days before the record date, which is the date on which a company determines the shareholders eligible to receive a 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. Thus, you can purchase nebag ag's shares before the 20th of May in order to receive the dividend, which the company will pay on the 22nd of May.

The company's next dividend payment will be CHF00.29 per share. Last year, in total, the company distributed CHF0.29 to shareholders. Based on the last year's worth of payments, nebag ag stock has a trailing yield of around 4.4% on the current share price of CHF06.55. We love seeing companies pay a dividend, but it's also important to be sure that laying the golden eggs isn't going to kill our golden goose! So we need to check whether the dividend payments are covered, and if earnings are growing.

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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. nebag ag lost money last year, so the fact that it's paying a dividend is certainly disconcerting. There might be a good reason for this, but we'd want to look into it further before getting comfortable.

Check out our latest analysis for nebag ag

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

Have Earnings And Dividends Been Growing?

Businesses with shrinking earnings are tricky from a dividend perspective. Investors love dividends, so if earnings fall and the dividend is reduced, expect a stock to be sold off heavily at the same time. nebag ag was unprofitable last year and, unfortunately, the general trend suggests its earnings have been in decline over the last five years, making us wonder if the dividend is sustainable at all.

The main way most investors will assess a company's dividend prospects is by checking the historical rate of dividend growth. nebag ag has seen its dividend decline 8.4% per annum on average over the past 10 years, which is not great to see. It's never nice to see earnings and dividends falling, but at least management has cut the dividend rather than potentially risk the company's health in an attempt to maintain it.

We update our analysis on nebag ag every 24 hours, so you can always get the latest insights on its financial health, here.

Final Takeaway

Is nebag ag worth buying for its dividend? It's hard to get past the idea of nebag ag paying a dividend despite reporting a loss over the past year - especially when the general trend in its earnings also looks to be negative. nebag ag doesn't appear to have a lot going for it, and we're not inclined to take a risk on owning it for the dividend.

Although, if you're still interested in nebag ag and want to know more, you'll find it very useful to know what risks this stock faces. For example, we've found 4 warning signs for nebag ag (2 are a bit unpleasant!) that deserve your attention before investing in the 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.