Dividend Investors: Don't Be Too Quick To Buy Going Public Media Aktiengesellschaft (ETR:G6P) For Its Upcoming Dividend

Regular readers will know that we love our dividends at Simply Wall St, which is why it's exciting to see Going Public Media Aktiengesellschaft (ETR:G6P) is about to trade ex-dividend in the next three days. The ex-dividend date is one business day 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. Accordingly, Going Public Media investors that purchase the stock on or after the 25th of June will not receive the dividend, which will be paid on the 27th of June.

The company's next dividend payment will be €0.02 per share, and in the last 12 months, the company paid a total of €0.02 per share. Calculating the last year's worth of payments shows that Going Public Media has a trailing yield of 1.2% on the current share price of €1.63. If you buy this business for its dividend, you should have an idea of whether Going Public Media's dividend is reliable and sustainable. So we need to investigate whether Going Public Media can afford its dividend, and if the dividend could grow.

View our latest analysis for Going Public Media

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. Last year, Going Public Media paid out 91% of its income as dividends, which is above a level that we're comfortable with, especially if the company needs to reinvest in its business.

Click here to see how much of its profit Going Public Media paid out over the last 12 months.

Have Earnings And Dividends Been Growing?

When earnings decline, dividend companies become much harder to analyse and own safely. If earnings decline and the company is forced to cut its dividend, investors could watch the value of their investment go up in smoke. Readers will understand then, why we're concerned to see Going Public Media's earnings per share have dropped 14% a year over the past five years. Such a sharp decline casts doubt on the future sustainability of the dividend.

Many investors will assess a company's dividend performance by evaluating how much the dividend payments have changed over time. Going Public Media's dividend payments per share have declined at 72% per year on average over the past two years, which is uninspiring. While it's not great that earnings and dividends per share have fallen in recent years, we're encouraged by the fact that management has trimmed the dividend rather than risk over-committing the company in a risky attempt to maintain yields to shareholders.

The Bottom Line

Is Going Public Media worth buying for its dividend? Not only are earnings per share shrinking, but Going Public Media is paying out a disconcertingly high percentage of its profit as dividends. It's not that we hate the business, but we feel that these characeristics are not desirable for investors seeking a reliable dividend stock to own for the long term. This is not an overtly appealing combination of characteristics, and we're just not that interested in this company's dividend.

With that being said, if you're still considering Going Public Media as an investment, you'll find it beneficial to know what risks this stock is facing. Our analysis shows 3 warning signs for Going Public Media that we strongly recommend you have a look at before investing in the company.

A common investing mistake is buying the first interesting stock you see. Here you can find a full list of high-yield 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com