Do These 3 Checks Before Buying Alm. Brand A/S (CPH:ALMB) For Its Upcoming Dividend

It looks like Alm. Brand A/S (CPH:ALMB) is about to go ex-dividend in the next three 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. 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. Therefore, if you purchase Alm. Brand's shares on or after the 27th of April, you won't be eligible to receive the dividend, when it is paid on the 1st of May.

The company's next dividend payment will be kr.0.30 per share, on the back of last year when the company paid a total of kr.0.30 to shareholders. Looking at the last 12 months of distributions, Alm. Brand has a trailing yield of approximately 2.3% on its current stock price of DKK12.82. Dividends are a major contributor to investment returns for long term holders, but only if the dividend continues to be paid. As a result, readers should always check whether Alm. Brand has been able to grow its dividends, or if the dividend might be cut.

See our latest analysis for Alm. Brand

Dividends are usually paid out of company profits, so if a company pays out more than it earned then its dividend is usually at greater risk of being cut. Alm. Brand reported a loss last year, so it's not great to see that it has continued paying a dividend.

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

Have Earnings And Dividends Been Growing?

Companies with falling earnings are riskier for dividend shareholders. If earnings decline and the company is forced to cut its dividend, investors could watch the value of their investment go up in smoke. Alm. Brand reported a loss last year, and the general trend suggests its earnings have also been declining in recent years, making us wonder if the dividend is at risk.

Many investors will assess a company's dividend performance by evaluating how much the dividend payments have changed over time. Alm. Brand's dividend payments per share have declined at 6.2% per year on average over the past eight years, which is uninspiring. 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.

Remember, you can always get a snapshot of Alm. Brand's financial health, by checking our visualisation of its financial health, here.

To Sum It Up

Is Alm. Brand worth buying for its dividend? It's hard to get past the idea of Alm. Brand paying a dividend despite reporting a loss over the past year - especially when the general trend in its earnings also looks to be negative. This is not an overtly appealing combination of characteristics, and we're just not that interested in this company's dividend.

So if you're still interested in Alm. Brand despite it's poor dividend qualities, you should be well informed on some of the risks facing this stock. In terms of investment risks, we've identified 1 warning sign with Alm. Brand and understanding them should be part of your investment process.

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