Stock Analysis

Kreditbanken A/S (CPH:KRE) Goes Ex-Dividend Soon

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Kreditbanken A/S (CPH:KRE) stock is about to trade ex-dividend in 3 days. Typically, the ex-dividend date is one business day before the record date which is the date on which a company determines the shareholders eligible to receive a dividend. 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 Kreditbanken's shares before the 23rd of March in order to receive the dividend, which the company will pay on the 27th of March.

The company's next dividend payment will be kr.50.00 per share, on the back of last year when the company paid a total of kr.50.00 to shareholders. Calculating the last year's worth of payments shows that Kreditbanken has a trailing yield of 1.2% on the current share price of DKK4180. Dividends are a major contributor to investment returns for long term holders, but only if the dividend continues to be paid. So we need to check whether the dividend payments are covered, and if earnings are growing.

View our latest analysis for Kreditbanken

Dividends are typically paid from company earnings. If a company pays more in dividends than it earned in profit, then the dividend could be unsustainable. Kreditbanken has a low and conservative payout ratio of just 19% of its income after tax.

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

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

CPSE:KRE Historic Dividend March 19th 2023

Have Earnings And Dividends Been Growing?

Companies with falling earnings are riskier for dividend shareholders. If earnings fall far enough, the company could be forced to cut its dividend. With that in mind, we're discomforted by Kreditbanken's 6.3% per annum decline in earnings in 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. Kreditbanken has delivered 9.6% dividend growth per year on average over the past 10 years.

To Sum It Up

Should investors buy Kreditbanken for the upcoming dividend? Earnings per share have shrunk noticeably in recent years, although we like that the company has a low payout ratio. This could suggest a cut to the dividend may not be a major risk in the near future. At best we would put it on a watch-list to see if business conditions improve, as it doesn't look like a clear opportunity right now.

With that being said, if dividends aren't your biggest concern with Kreditbanken, you should know about the other risks facing this business. Every company has risks, and we've spotted 2 warning signs for Kreditbanken (of which 1 is a bit unpleasant!) you should know about.

If you're in the market for strong dividend payers, we recommend checking our selection of top dividend stocks.

Valuation is complex, but we're helping make it simple.

Find out whether Kreditbanken is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.

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