Don't Race Out To Buy Mobotix AG (ETR:MBQ) Just Because It's Going Ex-Dividend

It looks like Mobotix AG (ETR:MBQ) is about to go ex-dividend in the next three days. If you purchase the stock on or after the 29th of January, you won't be eligible to receive this dividend, when it is paid on the 2nd of February.

Mobotix's next dividend payment will be €0.04 per share, and in the last 12 months, the company paid a total of €0.04 per share. Looking at the last 12 months of distributions, Mobotix has a trailing yield of approximately 0.5% on its current stock price of €7.75. Dividends are a major contributor to investment returns for long term holders, but only if the dividend continues to be paid. We need to see whether the dividend is covered by earnings and if it's growing.

Check out our latest analysis for Mobotix

If a company pays out more in dividends than it earned, then the dividend might become unsustainable - hardly an ideal situation. Mobotix paid out more than half (60%) of its earnings last year, which is a regular payout ratio for most companies.

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

Have Earnings And Dividends Been Growing?

Businesses with shrinking earnings are tricky from a dividend perspective. If earnings fall far enough, the company could be forced to cut its dividend. That's why it's vaguely disappointing to see earnings per share declined -4.3% on last year.

The main way most investors will assess a company's dividend prospects is by checking the historical rate of dividend growth. Mobotix has seen its dividend decline 19% per annum on average over the past 10 years, which is not great to see. It's never nice to see earnings and dividends falling, but at least management has cut the dividend rather than potentially risk the company's health in an attempt to maintain it.

To Sum It Up

Has Mobotix got what it takes to maintain its dividend payments? We're not enthused by the declining earnings per share, although at least the company's payout ratio is within a reasonable range, meaning it may not be at imminent risk of a dividend cut. It's not the most attractive proposition from a dividend perspective, and we'd probably give this one a miss for now.

With that being said, if you're still considering Mobotix as an investment, you'll find it beneficial to know what risks this stock is facing. For example, Mobotix has 4 warning signs (and 1 which doesn't sit too well with us) we think you should know about.

A common investment mistake is buying the first interesting stock you see. Here you can find a list of promising dividend stocks with a greater than 2% yield and an upcoming dividend.

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This article by Simply Wall St is general in nature. 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.
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