Gabriel Holding A/S (CPH:GABR) Will Pay A kr.5.00 Dividend In Three Days

Gabriel Holding A/S (CPH:GABR) is about to trade ex-dividend in the next three days. You can purchase shares before the 11th of December in order to receive the dividend, which the company will pay on the 15th of December.

Gabriel Holding's next dividend payment will be kr.5.00 per share, and in the last 12 months, the company paid a total of kr.5.00 per share. Based on the last year's worth of payments, Gabriel Holding has a trailing yield of 0.7% on the current stock price of DKK705. We love seeing companies pay a dividend, but it's also important to be sure that laying the golden eggs isn't going to kill our golden goose! So we need to investigate whether Gabriel Holding can afford its dividend, and if the dividend could grow.

Check out our latest analysis for Gabriel Holding

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. That's why it's good to see Gabriel Holding paying out a modest 38% of its earnings. That said, even highly profitable companies sometimes might not generate enough cash to pay the dividend, which is why we should always check if the dividend is covered by cash flow. Over the last year it paid out 73% of its free cash flow as dividends, within the usual range for most companies.

It's positive to see that Gabriel Holding's dividend is covered by both profits and cash flow, since this is generally a sign that the dividend is sustainable, and a lower payout ratio usually suggests a greater margin of safety before the dividend gets cut.

Click here to see how much of its profit Gabriel Holding 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 earnings fall far enough, the company could be forced to cut its dividend. With that in mind, we're encouraged by the steady growth at Gabriel Holding, with earnings per share up 3.4% on average over the last five years. Earnings growth has been slim and the company is paying out more than half of its earnings. While there is some room to both increase the payout ratio and reinvest in the business, generally the higher a payout ratio goes, the lower a company's prospects for future growth.

The main way most investors will assess a company's dividend prospects is by checking the historical rate of dividend growth. Gabriel Holding has delivered 4.4% dividend growth per year on average over the past 10 years. It's encouraging to see the company lifting dividends while earnings are growing, suggesting at least some corporate interest in rewarding shareholders.

The Bottom Line

Is Gabriel Holding an attractive dividend stock, or better left on the shelf? Earnings per share growth has been modest, and it's interesting that Gabriel Holding is paying out less than half of its earnings and more than half its cash flow to shareholders in the form of dividends. All things considered, we are not particularly enthused about Gabriel Holding from a dividend perspective.

While it's tempting to invest in Gabriel Holding for the dividends alone, you should always be mindful of the risks involved. Every company has risks, and we've spotted 2 warning signs for Gabriel Holding you should know about.

We wouldn't recommend just buying the first dividend stock you see, though. Here's a list of interesting 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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