PULSION Medical Systems SE (MUN:PUS) Is About To Go Ex-Dividend, And It Pays A 4.4% Yield

Regular readers will know that we love our dividends at Simply Wall St, which is why it's exciting to see PULSION Medical Systems SE (MUN:PUS) is about to trade ex-dividend in the next three 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. 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. Thus, you can purchase PULSION Medical Systems' shares before the 1st of July in order to receive the dividend, which the company will pay on the 3rd of July.

The company's next dividend payment will be €0.88 per share. Last year, in total, the company distributed €0.88 to shareholders. Calculating the last year's worth of payments shows that PULSION Medical Systems has a trailing yield of 4.4% on the current share price of €20.00. 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 PULSION Medical Systems 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. PULSION Medical Systems distributed an unsustainably high 144% of its profit as dividends to shareholders last year. Without more sustainable payment behaviour, the dividend looks precarious.

Check out our latest analysis for PULSION Medical Systems

Click here to see how much of its profit PULSION Medical Systems 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 decline and the company is forced to cut its dividend, investors could watch the value of their investment go up in smoke. It's encouraging to see PULSION Medical Systems has grown its earnings rapidly, up 26% a year for the past five years.

Another key way to measure a company's dividend prospects is by measuring its historical rate of dividend growth. PULSION Medical Systems has delivered an average of 36% per year annual increase in its dividend, based on the past 10 years of dividend payments. It's exciting to see that both earnings and dividends per share have grown rapidly over the past few years.

The Bottom Line

Has PULSION Medical Systems got what it takes to maintain its dividend payments? We're not enthused to see PULSION Medical Systems's dividend was not well covered by earnings over the last year, although it is great to see earnings growing. In sum this is a middling combination, and we find it hard to get excited about the company from a dividend perspective.

So if you want to do more digging on PULSION Medical Systems, you'll find it worthwhile knowing the risks that this stock faces. Our analysis shows 2 warning signs for PULSION Medical Systems and you should be aware of them before buying any shares.

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.