Línea Directa Aseguradora, S.A., Compañía de Seguros y Reaseguros (BME:LDA) Will Pay A €0.011178 Dividend In Three Days

Some investors rely on dividends for growing their wealth, and if you're one of those dividend sleuths, you might be intrigued to know that Línea Directa Aseguradora, S.A., Compañía de Seguros y Reaseguros (BME:LDA) is about to go ex-dividend in just 3 days. The ex-dividend date is usually set to be two business days 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. 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 Línea Directa Aseguradora Compañía de Seguros y Reaseguros' shares before the 15th of April in order to receive the dividend, which the company will pay on the 22nd of April.

The company's upcoming dividend is €0.011178 a share, following on from the last 12 months, when the company distributed a total of €0.055 per share to shareholders. Based on the last year's worth of payments, Línea Directa Aseguradora Compañía de Seguros y Reaseguros stock has a trailing yield of around 4.9% on the current share price of €1.136. If you buy this business for its dividend, you should have an idea of whether Línea Directa Aseguradora Compañía de Seguros y Reaseguros's dividend is reliable and sustainable. That's why we should always check whether the dividend payments appear sustainable, and if the company is growing.

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If a company pays out more in dividends than it earned, then the dividend might become unsustainable - hardly an ideal situation. Línea Directa Aseguradora Compañía de Seguros y Reaseguros paid out a comfortable 42% of its profit last year.

Generally speaking, the lower a company's payout ratios, the more resilient its dividend usually is.

Check out our latest analysis for Línea Directa Aseguradora Compañía de Seguros y Reaseguros

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

Have Earnings And Dividends Been Growing?

When earnings decline, dividend companies become much harder to analyse and own safely. If earnings decline and the company is forced to cut its dividend, investors could watch the value of their investment go up in smoke. Línea Directa Aseguradora Compañía de Seguros y Reaseguros's earnings per share have fallen at approximately 9.8% a year over the previous five years. When earnings per share fall, the maximum amount of dividends that can be paid also falls.

Many investors will assess a company's dividend performance by evaluating how much the dividend payments have changed over time. Línea Directa Aseguradora Compañía de Seguros y Reaseguros has seen its dividend decline 13% per annum on average over the past four years, which is not great to see. 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.

Final Takeaway

Has Línea Directa Aseguradora Compañía de Seguros y Reaseguros got what it takes to maintain its dividend payments? Línea Directa Aseguradora Compañía de Seguros y Reaseguros's earnings per share are down over the past five years, although it has the cushion of a low payout ratio, which would suggest a cut to the dividend is relatively unlikely. We think there are likely better opportunities out there.

With that being said, if dividends aren't your biggest concern with Línea Directa Aseguradora Compañía de Seguros y Reaseguros, you should know about the other risks facing this business. In terms of investment risks, we've identified 1 warning sign with Línea Directa Aseguradora Compañía de Seguros y Reaseguros and understanding them should be part of your investment process.

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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.