Grenke AG (ETR:GLJ) Pays A €0.40 Dividend In Just Four Days

Readers hoping to buy Grenke AG (ETR:GLJ) for its dividend will need to make their move shortly, as the stock is about to trade ex-dividend. 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 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 Grenke's shares before the 8th of May in order to receive the dividend, which the company will pay on the 12th of May.

The company's next dividend payment will be €0.40 per share, and in the last 12 months, the company paid a total of €0.40 per share. Last year's total dividend payments show that Grenke has a trailing yield of 2.9% on the current share price of €13.86. Dividends are an important source of income to many shareholders, but the health of the business is crucial to maintaining those dividends. So we need to investigate whether Grenke 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 Grenke's payout ratio is modest, at just 28% of profit.

Generally speaking, the lower a company's payout ratios, the more resilient its dividend usually is.

View our latest analysis for Grenke

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

Have Earnings And Dividends Been Growing?

Companies with falling earnings are riskier for dividend shareholders. If earnings decline and the company is forced to cut its dividend, investors could watch the value of their investment go up in smoke. Grenke's earnings per share have fallen at approximately 13% a year over the previous five years. When earnings per share fall, the maximum amount of dividends that can be paid also falls.

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, 10 years ago, Grenke has lifted its dividend by approximately 0.9% a year on average.

Final Takeaway

Is Grenke an attractive dividend stock, or better left on the shelf? Grenke's earnings per share are down over the past five years, although it has the cushion of a low payout ratio, which would suggest a cut to the dividend is relatively unlikely. It doesn't appear an outstanding opportunity, but could be worth a closer look.

If you're not too concerned about Grenke's ability to pay dividends, you should still be mindful of some of the other risks that this business faces. Be aware that Grenke is showing 2 warning signs in our investment analysis, and 1 of those is potentially serious...

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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.