Why You Might Be Interested In Vassiliko Cement Works Public Company Ltd (CSE:VCW) For Its Upcoming Dividend

It looks like Vassiliko Cement Works Public Company Ltd (CSE:VCW) is about to go ex-dividend in the next 3 days. The ex-dividend date is commonly two business days before the record date, which is the cut-off date for shareholders to be present on the company's books to be eligible for a dividend payment. 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. This means that investors who purchase Vassiliko Cement Works' shares on or after the 8th of October will not receive the dividend, which will be paid on the 4th of November.

The company's next dividend payment will be €0.15 per share. Last year, in total, the company distributed €0.30 to shareholders. Based on the last year's worth of payments, Vassiliko Cement Works stock has a trailing yield of around 6.8% on the current share price of €4.42. 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 check whether the dividend payments are covered, and if earnings are growing.

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Dividends are usually paid out of company profits, so if a company pays out more than it earned then its dividend is usually at greater risk of being cut. That's why it's good to see Vassiliko Cement Works paying out a modest 38% of its earnings. A useful secondary check can be to evaluate whether Vassiliko Cement Works generated enough free cash flow to afford its dividend. Dividends consumed 51% of the company's free cash flow last year, which is within a normal range for most dividend-paying organisations.

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 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?

Businesses with strong growth prospects usually make the best dividend payers, because it's easier to grow dividends when earnings per share are improving. If earnings fall far enough, the company could be forced to cut its dividend. Fortunately for readers, Vassiliko Cement Works's earnings per share have been growing at 11% a year for the past five years. Vassiliko Cement Works is paying out a bit over half its earnings, which suggests the company is striking a balance between reinvesting in growth, and paying dividends. This is a reasonable combination that could hint at some further dividend increases in the future.

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 31% a year on average. It's exciting to see that both earnings and dividends per share have grown rapidly over the past few years.

Final Takeaway

Has Vassiliko Cement Works got what it takes to maintain its dividend payments? Earnings per share have grown at a nice rate in recent times and over the last year, Vassiliko Cement Works paid out less than half its earnings and a bit over half its free cash flow. Overall we think this is an attractive combination and worthy of further research.

So while Vassiliko Cement Works looks good from a dividend perspective, it's always worthwhile being up to date with the risks involved in 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.