Vassiliko Cement Works Public Company Ltd (CSE:VCW) Pays A €0.18 Dividend In Just Four Days

Vassiliko Cement Works Public Company Ltd (CSE:VCW) stock is about to trade ex-dividend in 4 days. The ex-dividend date is usually set to be two business days 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 an important date to be aware of as any purchase of the stock made on or after this date might mean a late settlement that doesn't show on the record date. Accordingly, Vassiliko Cement Works investors that purchase the stock on or after the 17th of June will not receive the dividend, which will be paid on the 15th of July.

The company's upcoming dividend is €0.18 a share, following on from the last 12 months, when the company distributed a total of €0.29 per share to shareholders. Looking at the last 12 months of distributions, Vassiliko Cement Works has a trailing yield of approximately 7.3% on its current stock price of €4.12. If you buy this business for its dividend, you should have an idea of whether Vassiliko Cement Works's dividend is reliable and sustainable. As a result, readers should always check whether Vassiliko Cement Works has been able to grow its dividends, or if the dividend might be cut.

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Dividends are typically paid from company earnings. If a company pays more in dividends than it earned in profit, then the dividend could be unsustainable. It paid out 83% of its earnings as dividends last year, which is not unreasonable, but limits reinvestment in the business and leaves the dividend vulnerable to a business downturn. We'd be concerned if earnings began to decline. 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 (78%) 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 Vassiliko Cement Works'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.

Check out our latest analysis for Vassiliko Cement Works

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?

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 Vassiliko Cement Works, with earnings per share up 4.9% on average over the last five years. A payout ratio of 83% looks like a tacit signal from management that reinvestment opportunities in the business are low. In line with limited earnings growth in recent years, this is not the most appealing combination.

The main way most investors will assess a company's dividend prospects is by checking the historical rate of dividend growth. In the last 10 years, Vassiliko Cement Works has lifted its dividend by approximately 31% 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

Has Vassiliko Cement Works got what it takes to maintain its dividend payments? Earnings per share have been growing modestly and Vassiliko Cement Works paid out a bit over half of its earnings and free cash flow last year. Overall, it's hard to get excited about Vassiliko Cement Works from a dividend perspective.

If you're not too concerned about Vassiliko Cement Works's ability to pay dividends, you should still be mindful of some of the other risks that this business faces. 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.

If you're in the market for strong dividend payers, we recommend checking our selection of top dividend stocks.

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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.