Be Sure To Check Out Sparekassen Sjælland-Fyn A/S (CPH:SPKSJF) Before It Goes Ex-Dividend

Readers hoping to buy Sparekassen Sjælland-Fyn A/S (CPH:SPKSJF) for its dividend will need to make their move shortly, as the stock is about to trade ex-dividend. The ex-dividend date is usually set to be one business day before the record date which is the cut-off date on which you must be present on the company's books as a shareholder in order to receive the dividend. 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. This means that investors who purchase Sparekassen Sjælland-Fyn's shares on or after the 8th of March will not receive the dividend, which will be paid on the 12th of March.

The company's upcoming dividend is kr.8.00 a share, following on from the last 12 months, when the company distributed a total of kr.8.00 per share to shareholders. Looking at the last 12 months of distributions, Sparekassen Sjælland-Fyn has a trailing yield of approximately 3.6% on its current stock price of kr.222.00. If you buy this business for its dividend, you should have an idea of whether Sparekassen Sjælland-Fyn'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.

View our latest analysis for Sparekassen Sjælland-Fyn

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. That's why it's good to see Sparekassen Sjælland-Fyn paying out a modest 27% of its earnings.

When a company paid out less in dividends than it earned in profit, this generally suggests its dividend is affordable. The lower the % of its profit that it pays out, the greater the margin of safety for the dividend if the business enters a downturn.

Click here to see how much of its profit Sparekassen Sjælland-Fyn paid out over the last 12 months.

Have Earnings And Dividends Been Growing?

Stocks in companies that generate sustainable earnings growth often make the best dividend prospects, as it is easier to lift the dividend when earnings are rising. If business enters a downturn and the dividend is cut, the company could see its value fall precipitously. It's encouraging to see Sparekassen Sjælland-Fyn has grown its earnings rapidly, up 26% a year for the past five years.

The main way most investors will assess a company's dividend prospects is by checking the historical rate of dividend growth. Since the start of our data, eight years ago, Sparekassen Sjælland-Fyn has lifted its dividend by approximately 13% a year on average. Both per-share earnings and dividends have both been growing rapidly in recent times, which is great to see.

Final Takeaway

From a dividend perspective, should investors buy or avoid Sparekassen Sjælland-Fyn? Companies like Sparekassen Sjælland-Fyn that are growing rapidly and paying out a low fraction of earnings, are usually reinvesting heavily in their business. Perhaps even more importantly - this can sometimes signal management is focused on the long term future of the business. In summary, Sparekassen Sjælland-Fyn appears to have some promise as a dividend stock, and we'd suggest taking a closer look at it.

While it's tempting to invest in Sparekassen Sjælland-Fyn for the dividends alone, you should always be mindful of the risks involved. To help with this, we've discovered 1 warning sign for Sparekassen Sjælland-Fyn that you should be aware of before investing in their shares.

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

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

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.