SLOMAN NEPTUN Schiffahrts-Aktiengesellschaft (HMSE:NEP) Passed Our Checks, And It's About To Pay A €1.50 Dividend

SLOMAN NEPTUN Schiffahrts-Aktiengesellschaft (HMSE:NEP) is about to trade ex-dividend in the next four days. The ex-dividend date is one business day before a company's record date, which is the date on which the company determines which shareholders are entitled to receive a dividend. The ex-dividend date is an important date to be aware of as any purchase of the stock made on or after this date might mean a late settlement that doesn't show on the record date. In other words, investors can purchase SLOMAN NEPTUN Schiffahrts-Aktiengesellschaft's shares before the 5th of July in order to be eligible for the dividend, which will be paid on the 9th of July.

The company's upcoming dividend is €1.50 a share, following on from the last 12 months, when the company distributed a total of €1.50 per share to shareholders. Based on the last year's worth of payments, SLOMAN NEPTUN Schiffahrts-Aktiengesellschaft has a trailing yield of 2.6% on the current stock price of €58.00. If you buy this business for its dividend, you should have an idea of whether SLOMAN NEPTUN Schiffahrts-Aktiengesellschaft's dividend is reliable and sustainable. That's why we should always check whether the dividend payments appear sustainable, and if the company is growing.

See our latest analysis for SLOMAN NEPTUN Schiffahrts-Aktiengesellschaft

If a company pays out more in dividends than it earned, then the dividend might become unsustainable - hardly an ideal situation. SLOMAN NEPTUN Schiffahrts-Aktiengesellschaft paid out just 6.4% of its profit last year, which we think is conservatively low and leaves plenty of margin for unexpected circumstances. A useful secondary check can be to evaluate whether SLOMAN NEPTUN Schiffahrts-Aktiengesellschaft generated enough free cash flow to afford its dividend. What's good is that dividends were well covered by free cash flow, with the company paying out 5.6% of its cash flow last year.

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.

Click here to see how much of its profit SLOMAN NEPTUN Schiffahrts-Aktiengesellschaft 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. That's why it's comforting to see SLOMAN NEPTUN Schiffahrts-Aktiengesellschaft's earnings have been skyrocketing, up 86% per annum for the past five years. SLOMAN NEPTUN Schiffahrts-Aktiengesellschaft earnings per share have been sprinting ahead like the Road Runner at a track and field day; scarcely stopping even for a cheeky "beep-beep". We also like that it is reinvesting most of its profits in its business.'

The main way most investors will assess a company's dividend prospects is by checking the historical rate of dividend growth. In the last eight years, SLOMAN NEPTUN Schiffahrts-Aktiengesellschaft has lifted its dividend by approximately 5.2% a year on average. It's good to see both earnings and the dividend have improved - although the former has been rising much quicker than the latter, possibly due to the company reinvesting more of its profits in growth.

The Bottom Line

Is SLOMAN NEPTUN Schiffahrts-Aktiengesellschaft an attractive dividend stock, or better left on the shelf? It's great that SLOMAN NEPTUN Schiffahrts-Aktiengesellschaft is growing earnings per share while simultaneously paying out a low percentage of both its earnings and cash flow. It's disappointing to see the dividend has been cut at least once in the past, but as things stand now, the low payout ratio suggests a conservative approach to dividends, which we like. It's a promising combination that should mark this company worthy of closer attention.

In light of that, while SLOMAN NEPTUN Schiffahrts-Aktiengesellschaft has an appealing dividend, it's worth knowing the risks involved with this stock. To help with this, we've discovered 1 warning sign for SLOMAN NEPTUN Schiffahrts-Aktiengesellschaft that you should be aware of before investing in their shares.

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.

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