Stock Analysis

Four Days Left Until Plazza AG (VTX:PLAN) Trades Ex-Dividend

Published
SWX:PLAN
Source: Shutterstock

It looks like Plazza AG (VTX:PLAN) is about to go ex-dividend in the next four 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. Thus, you can purchase Plazza's shares before the 11th of April in order to receive the dividend, which the company will pay on the 13th of April.

The company's next dividend payment will be CHF7.00 per share, and in the last 12 months, the company paid a total of CHF7.00 per share. Based on the last year's worth of payments, Plazza stock has a trailing yield of around 2.2% on the current share price of CHF314. If you buy this business for its dividend, you should have an idea of whether Plazza's dividend is reliable and sustainable. As a result, readers should always check whether Plazza has been able to grow its dividends, or if the dividend might be cut.

Check out our latest analysis for Plazza

If a company pays out more in dividends than it earned, then the dividend might become unsustainable - hardly an ideal situation. Plazza is paying out an acceptable 61% of its profit, a common payout level among most companies. That said, even highly profitable companies sometimes might not generate enough cash to pay the dividend, which is why we should always check if the dividend is covered by cash flow. Over the last year, it paid out more than three-quarters (83%) of its free cash flow generated, which is fairly high and may be starting to limit reinvestment in the business.

It's positive to see that Plazza's dividend is covered by both profits and cash flow, since this is generally a sign that the dividend is sustainable, and a lower payout ratio usually suggests a greater margin of safety before the dividend gets cut.

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

historic-dividend
SWX:PLAN Historic Dividend April 6th 2023

Have Earnings And Dividends Been Growing?

Businesses with strong growth prospects usually make the best dividend payers, because it's easier to grow dividends when earnings per share are improving. Investors love dividends, so if earnings fall and the dividend is reduced, expect a stock to be sold off heavily at the same time. This is why it's a relief to see Plazza earnings per share are up 6.8% per annum over the last five years. Decent historical earnings per share growth suggests Plazza has been effectively growing value for shareholders. However, it's now paying out more than half its earnings as dividends. If management lifts the payout ratio further, we'd take this as a tacit signal that the company's growth prospects are slowing.

Many investors will assess a company's dividend performance by evaluating how much the dividend payments have changed over time. Plazza has delivered 13% dividend growth per year on average over the past seven years. We're glad to see dividends rising alongside earnings over a number of years, which may be a sign the company intends to share the growth with shareholders.

Final Takeaway

Has Plazza got what it takes to maintain its dividend payments? Earnings per share have been growing modestly and Plazza paid out a bit over half of its earnings and free cash flow last year. Overall, it's not a bad combination, but we feel that there are likely more attractive dividend prospects out there.

If you're not too concerned about Plazza's ability to pay dividends, you should still be mindful of some of the other risks that this business faces. For example, we've found 3 warning signs for Plazza that we recommend you consider before investing in the business.

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.

Valuation is complex, but we're helping make it simple.

Find out whether Plazza is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.

View the Free Analysis

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.