Don't Race Out To Buy HIAG Immobilien Holding AG (VTX:HIAG) Just Because It's Going Ex-Dividend

It looks like HIAG Immobilien Holding AG (VTX:HIAG) is about to go ex-dividend in the next three days. The ex-dividend date occurs one day before the record date which is the day on which shareholders need to be on the company's books in order 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. This means that investors who purchase HIAG Immobilien Holding's shares on or after the 23rd of April will not receive the dividend, which will be paid on the 25th of April.

The company's next dividend payment will be CHF03.10 per share. Last year, in total, the company distributed CHF3.10 to shareholders. Looking at the last 12 months of distributions, HIAG Immobilien Holding has a trailing yield of approximately 4.0% on its current stock price of CHF076.80. 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 investigate whether HIAG Immobilien Holding can afford its dividend, and if the dividend could grow.

See our latest analysis for HIAG Immobilien Holding

If a company pays out more in dividends than it earned, then the dividend might become unsustainable - hardly an ideal situation. HIAG Immobilien Holding paid out more than half (67%) of its earnings last year, which is a regular payout ratio for most companies.

Click here to see the company's payout ratio, plus analyst estimates of its future dividends.

Have Earnings And Dividends Been Growing?

When earnings decline, dividend companies become much harder to analyse and own safely. If earnings decline and the company is forced to cut its dividend, investors could watch the value of their investment go up in smoke. Readers will understand then, why we're concerned to see HIAG Immobilien Holding's earnings per share have dropped 9.4% a year over the past five years. Such a sharp decline casts doubt on the future sustainability of the dividend.

Another key way to measure a company's dividend prospects is by measuring its historical rate of dividend growth. HIAG Immobilien Holding's dividend payments per share have declined at 0.7% per year on average over the past nine years, which is uninspiring.

To Sum It Up

From a dividend perspective, should investors buy or avoid HIAG Immobilien Holding? Earnings per share have been declining and the company is paying out more than half its profits to shareholders; not an enticing combination. We're unconvinced on the company's merits, and think there might be better opportunities out there.

However if you're still interested in HIAG Immobilien Holding as a potential investment, you should definitely consider some of the risks involved with HIAG Immobilien Holding. We've identified 3 warning signs with HIAG Immobilien Holding (at least 1 which is significant), and understanding these should be part of your investment process.

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

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.