It Might Not Be A Great Idea To Buy JSS Real Estate SOCIMI, S.A. (BME:YJSS) For Its Next Dividend

Regular readers will know that we love our dividends at Simply Wall St, which is why it's exciting to see JSS Real Estate SOCIMI, S.A. (BME:YJSS) is about to trade ex-dividend in the next three days. The ex-dividend date is one business day before the record date, which is the cut-off date for shareholders to be present on the company's books to be eligible for a dividend payment. 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 JSS Real Estate SOCIMI's shares before the 24th of July in order to receive the dividend, which the company will pay on the 26th of July.

The company's next dividend payment will be €0.0013356 per share, on the back of last year when the company paid a total of €0.95 to shareholders. Calculating the last year's worth of payments shows that JSS Real Estate SOCIMI has a trailing yield of 5.6% on the current share price of €8.60. Dividends are an important source of income to many shareholders, but the health of the business is crucial to maintaining those dividends. That's why we should always check whether the dividend payments appear sustainable, and if the company is growing.

See our latest analysis for JSS Real Estate SOCIMI

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. Last year, JSS Real Estate SOCIMI paid out 98% of its income as dividends, which is above a level that we're comfortable with, especially if the company needs to reinvest in its business.

When a company pays out a dividend that is not well covered by profits, the dividend is generally seen as more vulnerable to being cut.

Click here to see how much of its profit JSS Real Estate SOCIMI paid out over the last 12 months.

Have Earnings And Dividends Been Growing?

Stocks with flat earnings can still be attractive dividend payers, but it is important to be more conservative with your approach and demand a greater margin for safety when it comes to dividend sustainability. If earnings decline and the company is forced to cut its dividend, investors could watch the value of their investment go up in smoke. It's not encouraging to see that JSS Real Estate SOCIMI's earnings are effectively flat over the past five years. Better than seeing them fall off a cliff, for sure, but the best dividend stocks grow their earnings meaningfully over the long run.

Many investors will assess a company's dividend performance by evaluating how much the dividend payments have changed over time. JSS Real Estate SOCIMI has delivered an average of 15% per year annual increase in its dividend, based on the past three years of dividend payments.

To Sum It Up

Is JSS Real Estate SOCIMI worth buying for its dividend? JSS Real Estate SOCIMI's earnings have barely moved in recent times, and the company is paying out a disagreeably high percentage of its earnings; a mediocre combination. This is not an overtly appealing combination of characteristics, and we're just not that interested in this company's dividend.

Having said that, if you're looking at this stock without much concern for the dividend, you should still be familiar of the risks involved with JSS Real Estate SOCIMI. For example, we've found 4 warning signs for JSS Real Estate SOCIMI (2 are concerning!) that deserve your attention before investing in the shares.

A common investing mistake is buying the first interesting stock you see. Here you can find a full list of high-yield 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.

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