Just Four Days Till BVZ Holding AG (VTX:BVZN) Will Be Trading Ex-Dividend

BVZ Holding AG (VTX:BVZN) stock is about to trade ex-dividend in four 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 as the process of settlement involves two full business days. So if you miss that date, you would not show up on the company's books on the record date. In other words, investors can purchase BVZ Holding's shares before the 17th of April in order to be eligible for the dividend, which will be paid on the 19th of April.

The company's next dividend payment will be CHF016.00 per share, and in the last 12 months, the company paid a total of CHF16.00 per share. Last year's total dividend payments show that BVZ Holding has a trailing yield of 1.6% on the current share price of CHF01000.00. Dividends are a major contributor to investment returns for long term holders, but only if the dividend continues to be paid. As a result, readers should always check whether BVZ Holding has been able to grow its dividends, or if the dividend might be cut.

Check out our latest analysis for BVZ Holding

If a company pays out more in dividends than it earned, then the dividend might become unsustainable - hardly an ideal situation. BVZ Holding has a low and conservative payout ratio of just 12% of its income after tax. 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. BVZ Holding paid a dividend despite reporting negative free cash flow over the last twelve months. This may be due to heavy investment in the business, but this is still suboptimal from a dividend sustainability perspective.

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

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 decline and the company is forced to cut its dividend, investors could watch the value of their investment go up in smoke. With that in mind, we're encouraged by the steady growth at BVZ Holding, with earnings per share up 7.2% on average over the last five years.

The main way most investors will assess a company's dividend prospects is by checking the historical rate of dividend growth. BVZ Holding has delivered an average of 4.8% per year annual increase in its dividend, based on the past 10 years of dividend payments. 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.

The Bottom Line

Has BVZ Holding got what it takes to maintain its dividend payments? BVZ Holding delivered reasonable earnings per share growth in recent times, and paid out less than half its profits and -3.4% of its cash flow over the last year, which is a mediocre outcome. In summary, while it has some positive characteristics, we're not inclined to race out and buy BVZ Holding today.

So if you want to do more digging on BVZ Holding, you'll find it worthwhile knowing the risks that this stock faces. Every company has risks, and we've spotted 2 warning signs for BVZ Holding you should know about.

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.