Why You Might Be Interested In Ellinas Finance Public Company Limited (CSE:ELF) For Its Upcoming Dividend

Ellinas Finance Public Company Limited (CSE:ELF) is about to trade ex-dividend in the next 3 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. 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. Thus, you can purchase Ellinas Finance's shares before the 15th of July in order to receive the dividend, which the company will pay on the 6th of August.

The company's next dividend payment will be €0.0275 per share, and in the last 12 months, the company paid a total of €0.028 per share. Based on the last year's worth of payments, Ellinas Finance stock has a trailing yield of around 6.3% on the current share price of €0.44. 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 Ellinas Finance can afford its dividend, and if the dividend could grow.

Check out our latest analysis for Ellinas Finance

If a company pays out more in dividends than it earned, then the dividend might become unsustainable - hardly an ideal situation. Ellinas Finance paid out more than half (59%) of its earnings last year, which is a regular payout ratio for most companies. Ellinas Finance paid a dividend despite reporting negative free cash flow last year. That's typically a bad combination and - if this were more than a one-off - not sustainable.

Companies that pay out less in dividends than they earn in profits generally have more sustainable dividends. The lower the payout ratio, the more wiggle room the business has before it could be forced to cut the dividend.

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

Have Earnings And Dividends Been Growing?

Stocks in companies that generate sustainable earnings growth often make the best dividend prospects, as it is easier to lift the dividend when earnings are rising. If earnings fall far enough, the company could be forced to cut its dividend. For this reason, we're glad to see Ellinas Finance's earnings per share have risen 12% per annum over the last five years.

Many investors will assess a company's dividend performance by evaluating how much the dividend payments have changed over time. Since the start of our data, six years ago, Ellinas Finance has lifted its dividend by approximately 7.3% a year on average. 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.

To Sum It Up

Is Ellinas Finance an attractive dividend stock, or better left on the shelf? Earnings per share are growing at an attractive rate, and Ellinas Finance is paying out a bit over half its profits. Overall, Ellinas Finance looks like a promising dividend stock in this analysis, and we think it would be worth investigating further.

In light of that, while Ellinas Finance has an appealing dividend, it's worth knowing the risks involved with this stock. Our analysis shows 6 warning signs for Ellinas Finance that we strongly recommend you have a look at before investing in the company.

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.

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