Bluestar Adisseo Company (SHSE:600299) Looks Interesting, And It's About To Pay A Dividend

Bluestar Adisseo Company (SHSE:600299) is about to trade ex-dividend in the next three days. The ex-dividend date generally occurs two days 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. 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. Meaning, you will need to purchase Bluestar Adisseo's shares before the 28th of March to receive the dividend, which will be paid on the 28th of March.

The company's next dividend payment will be CN¥0.06 per share, on the back of last year when the company paid a total of CN¥0.24 to shareholders. Looking at the last 12 months of distributions, Bluestar Adisseo has a trailing yield of approximately 2.2% on its current stock price of CN¥10.95. If you buy this business for its dividend, you should have an idea of whether Bluestar Adisseo's dividend is reliable and sustainable. So we need to investigate whether Bluestar Adisseo can afford its dividend, and if the dividend could grow.

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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. Fortunately Bluestar Adisseo's payout ratio is modest, at just 40% of profit. Yet cash flows are even more important than profits for assessing a dividend, so we need to see if the company generated enough cash to pay its distribution. Luckily it paid out just 21% of its free cash flow last year.

It's encouraging to see that the dividend is covered by both profit and cash flow. This generally suggests the dividend is sustainable, as long as earnings don't drop precipitously.

See our latest analysis for Bluestar Adisseo

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

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 fall far enough, the company could be forced to cut its dividend. With that in mind, we're encouraged by the steady growth at Bluestar Adisseo, with earnings per share up 3.9% on average over the last five years. Earnings per share growth in recent times has not been a standout. Yet there are several ways to grow the dividend, and one of them is simply that the company may choose to pay out more of its earnings as dividends.

The main way most investors will assess a company's dividend prospects is by checking the historical rate of dividend growth. Since the start of our data, nine years ago, Bluestar Adisseo has lifted its dividend by approximately 4.3% a year on average. It's encouraging to see the company lifting dividends while earnings are growing, suggesting at least some corporate interest in rewarding shareholders.

To Sum It Up

Has Bluestar Adisseo got what it takes to maintain its dividend payments? Earnings per share have been growing moderately, and Bluestar Adisseo is paying out less than half its earnings and cash flow as dividends, which is an attractive combination as it suggests the company is investing in growth. It might be nice to see earnings growing faster, but Bluestar Adisseo is being conservative with its dividend payouts and could still perform reasonably over the long run. There's a lot to like about Bluestar Adisseo, and we would prioritise taking a closer look at it.

In light of that, while Bluestar Adisseo has an appealing dividend, it's worth knowing the risks involved with this stock. Every company has risks, and we've spotted 1 warning sign for Bluestar Adisseo you should know about.

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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.