Four Days Left To Buy Vassiliko Cement Works Public Company Ltd (CSE:VCW) Before The Ex-Dividend Date

Vassiliko Cement Works Public Company Ltd (CSE:VCW) stock is about to trade ex-dividend in four days. Typically, the ex-dividend date is one business day before the record date which is the date on which a company determines the shareholders eligible 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 Vassiliko Cement Works' shares before the 9th of October to receive the dividend, which will be paid on the 5th of November.

The company's next dividend payment will be €0.12 per share, on the back of last year when the company paid a total of €0.25 to shareholders. Calculating the last year's worth of payments shows that Vassiliko Cement Works has a trailing yield of 7.2% on the current share price of €3.48. If you buy this business for its dividend, you should have an idea of whether Vassiliko Cement Works's dividend is reliable and sustainable. So we need to investigate whether Vassiliko Cement Works can afford its dividend, and if the dividend could grow.

View our latest analysis for Vassiliko Cement Works

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. That's why it's good to see Vassiliko Cement Works paying out a modest 47% of its earnings. A useful secondary check can be to evaluate whether Vassiliko Cement Works generated enough free cash flow to afford its dividend. It paid out 95% of its free cash flow in the form of dividends last year, which is outside the comfort zone for most businesses. Companies usually need cash more than they need earnings - expenses don't pay themselves - so it's not great to see it paying out so much of its cash flow.

While Vassiliko Cement Works's dividends were covered by the company's reported profits, cash is somewhat more important, so it's not great to see that the company didn't generate enough cash to pay its dividend. Cash is king, as they say, and were Vassiliko Cement Works to repeatedly pay dividends that aren't well covered by cashflow, we would consider this a warning sign.

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

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. Fortunately for readers, Vassiliko Cement Works's earnings per share have been growing at 11% a year for the past five years. Earnings have been growing at a decent rate, but we're concerned dividend payments consumed most of the company's cash flow over the past year.

Many investors will assess a company's dividend performance by evaluating how much the dividend payments have changed over time. In the past 10 years, Vassiliko Cement Works has increased its dividend at approximately 32% a year on average. Both per-share earnings and dividends have both been growing rapidly in recent times, which is great to see.

The Bottom Line

From a dividend perspective, should investors buy or avoid Vassiliko Cement Works? We're glad to see the company has been improving its earnings per share while also paying out a low percentage of income. However, it's not great to see it paying out what we see as an uncomfortably high percentage of its cash flow. In summary, while it has some positive characteristics, we're not inclined to race out and buy Vassiliko Cement Works today.

In light of that, while Vassiliko Cement Works has an appealing dividend, it's worth knowing the risks involved with this stock. In terms of investment risks, we've identified 1 warning sign with Vassiliko Cement Works and understanding them should be part of your investment process.

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.