Alquiber Quality, S.A. (BME:ALQ) Stock Goes Ex-Dividend In Just Three Days

Alquiber Quality, S.A. (BME:ALQ) stock is about to trade ex-dividend in 3 days. The ex-dividend date is one business day before a company's record date, which is the date on which the company determines which shareholders are entitled 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. Thus, you can purchase Alquiber Quality's shares before the 19th of June in order to receive the dividend, which the company will pay on the 21st of June.

The company's next dividend payment will be €0.23328 per share, and in the last 12 months, the company paid a total of €0.29 per share. Looking at the last 12 months of distributions, Alquiber Quality has a trailing yield of approximately 3.3% on its current stock price of €8.60. If you buy this business for its dividend, you should have an idea of whether Alquiber Quality's dividend is reliable and sustainable. So we need to investigate whether Alquiber Quality can afford its dividend, and if the dividend could grow.

See our latest analysis for Alquiber Quality

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. That's why it's good to see Alquiber Quality paying out a modest 25% of its earnings. A useful secondary check can be to evaluate whether Alquiber Quality generated enough free cash flow to afford its dividend. Alquiber Quality paid a dividend despite reporting negative free cash flow over the last twelve months. This may be due to heavy investment in the business, but this is still suboptimal from a dividend sustainability perspective.

Click here to see how much of its profit Alquiber Quality paid out over the last 12 months.

Have Earnings And Dividends Been Growing?

Businesses with strong growth prospects usually make the best dividend payers, because it's easier to grow dividends when earnings per share are improving. Investors love dividends, so if earnings fall and the dividend is reduced, expect a stock to be sold off heavily at the same time. It's encouraging to see Alquiber Quality has grown its earnings rapidly, up 27% a year for the past five years.

The main way most investors will assess a company's dividend prospects is by checking the historical rate of dividend growth. Alquiber Quality has delivered 34% dividend growth per year on average over the past three years. It's exciting to see that both earnings and dividends per share have grown rapidly over the past few years.

The Bottom Line

From a dividend perspective, should investors buy or avoid Alquiber Quality? We're glad to see the company has been improving its earnings per share while also paying out a low percentage of income. However, it's not great to see it paying out what we see as an uncomfortably high percentage of its cash flow. All things considered, we are not particularly enthused about Alquiber Quality from a dividend perspective.

With that in mind, a critical part of thorough stock research is being aware of any risks that stock currently faces. Be aware that Alquiber Quality is showing 4 warning signs in our investment analysis, and 2 of those are a bit concerning...

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.

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