Why You Might Be Interested In Arteche Lantegi Elkartea, S.A. (BME:ART) For Its Upcoming Dividend

Regular readers will know that we love our dividends at Simply Wall St, which is why it's exciting to see Arteche Lantegi Elkartea, S.A. (BME:ART) is about to trade ex-dividend in the next three days. 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. Thus, you can purchase Arteche Lantegi Elkartea's shares before the 8th of May in order to receive the dividend, which the company will pay on the 10th of May.

The company's next dividend payment will be €0.085736 per share. Last year, in total, the company distributed €0.11 to shareholders. Calculating the last year's worth of payments shows that Arteche Lantegi Elkartea has a trailing yield of 2.3% on the current share price of €4.70. If you buy this business for its dividend, you should have an idea of whether Arteche Lantegi Elkartea's dividend is reliable and sustainable. We need to see whether the dividend is covered by earnings and if it's growing.

View our latest analysis for Arteche Lantegi Elkartea

If a company pays out more in dividends than it earned, then the dividend might become unsustainable - hardly an ideal situation. Arteche Lantegi Elkartea paid out 50% of its earnings to investors last year, a normal payout level for most businesses.

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

Have Earnings And Dividends Been Growing?

Companies with consistently growing earnings per share generally make the best dividend stocks, as they usually find it easier to grow dividends per share. Investors love dividends, so if earnings fall and the dividend is reduced, expect a stock to be sold off heavily at the same time. For this reason, we're glad to see Arteche Lantegi Elkartea's earnings per share have risen 18% per annum over the last three years. Arteche Lantegi Elkartea has an average payout ratio which suggests a balance between growing earnings and rewarding shareholders. Given the quick rate of earnings per share growth and current level of payout, there may be a chance of further dividend increases in the future.

Another key way to measure a company's dividend prospects is by measuring its historical rate of dividend growth. Arteche Lantegi Elkartea has delivered 53% dividend growth per year on average over the past two years. It's great to see earnings per share growing rapidly over several years, and dividends per share growing right along with it.

To Sum It Up

Is Arteche Lantegi Elkartea an attractive dividend stock, or better left on the shelf? Arteche Lantegi Elkartea has an acceptable payout ratio and its earnings per share have been improving at a decent rate. Overall, Arteche Lantegi Elkartea looks like a promising dividend stock in this analysis, and we think it would be worth investigating further.

While it's tempting to invest in Arteche Lantegi Elkartea for the dividends alone, you should always be mindful of the risks involved. In terms of investment risks, we've identified 1 warning sign with Arteche Lantegi Elkartea and understanding them should be part of your investment process.

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.