aktsiaselts Linda Nektar (TAL:LINDA) Passed Our Checks, And It's About To Pay A €0.10 Dividend

Regular readers will know that we love our dividends at Simply Wall St, which is why it's exciting to see aktsiaselts Linda Nektar (TAL:LINDA) is about to trade 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. 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 aktsiaselts Linda Nektar's shares before the 31st of May in order to receive the dividend, which the company will pay on the 15th of June.

The company's next dividend payment will be €0.10 per share. Last year, in total, the company distributed €0.10 to shareholders. Calculating the last year's worth of payments shows that aktsiaselts Linda Nektar has a trailing yield of 1.3% on the current share price of €8. 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 aktsiaselts Linda Nektar can afford its dividend, and if the dividend could grow.

View our latest analysis for aktsiaselts Linda Nektar

If a company pays out more in dividends than it earned, then the dividend might become unsustainable - hardly an ideal situation. aktsiaselts Linda Nektar is paying out an acceptable 58% of its profit, a common payout level among most companies. A useful secondary check can be to evaluate whether aktsiaselts Linda Nektar generated enough free cash flow to afford its dividend.

Click here to see how much of its profit aktsiaselts Linda Nektar 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. Investors love dividends, so if earnings fall and the dividend is reduced, expect a stock to be sold off heavily at the same time. That's why it's comforting to see aktsiaselts Linda Nektar's earnings have been skyrocketing, up 26% per annum for the past five years.

Many investors will assess a company's dividend performance by evaluating how much the dividend payments have changed over time. Since the start of our data, seven years ago, aktsiaselts Linda Nektar has lifted its dividend by approximately 1.5% a year on average. Earnings per share have been growing much quicker than dividends, potentially because aktsiaselts Linda Nektar is keeping back more of its profits to grow the business.

The Bottom Line

Should investors buy aktsiaselts Linda Nektar for the upcoming dividend? Earnings per share growth is a positive, and the company's payout ratio looks normal. However, we note aktsiaselts Linda Nektar paid out a much higher percentage of its free cash flow, which makes us uncomfortable. Overall we're not hugely bearish on the stock, but there are likely better dividend investments out there.

However if you're still interested in aktsiaselts Linda Nektar as a potential investment, you should definitely consider some of the risks involved with aktsiaselts Linda Nektar. For example, aktsiaselts Linda Nektar has 3 warning signs (and 1 which is significant) we think you should know about.

Generally, we wouldn't recommend just buying the first dividend stock you see. Here's a curated list of interesting stocks that are strong dividend payers.

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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.