Income Investors Should Know That Alexandria Group Oyj (HEL:ALEX) Goes Ex-Dividend Soon

Readers hoping to buy Alexandria Group Oyj (HEL:ALEX) for its dividend will need to make their move shortly, as the stock is about to trade ex-dividend. 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. The ex-dividend date is of consequence because whenever a stock is bought or sold, the trade takes at least two business day to settle. This means that investors who purchase Alexandria Group Oyj's shares on or after the 15th of March will not receive the dividend, which will be paid on the 25th of March.

The company's next dividend payment will be €0.78 per share, and in the last 12 months, the company paid a total of €0.78 per share. Based on the last year's worth of payments, Alexandria Group Oyj stock has a trailing yield of around 8.2% on the current share price of €9.48. Dividends are an important source of income to many shareholders, but the health of the business is crucial to maintaining those dividends. So we need to investigate whether Alexandria Group Oyj can afford its dividend, and if the dividend could grow.

View our latest analysis for Alexandria Group Oyj

Dividends are typically paid out of company income, so if a company pays out more than it earned, its dividend is usually at a higher risk of being cut. Last year, Alexandria Group Oyj paid out 101% 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 the dividend payout ratio is high, as it is in this case, the dividend is usually at greater risk of being cut in the future.

Click here to see how much of its profit Alexandria Group Oyj 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. If business enters a downturn and the dividend is cut, the company could see its value fall precipitously. Fortunately for readers, Alexandria Group Oyj's earnings per share have been growing at 19% a year for the past three years.

The main way most investors will assess a company's dividend prospects is by checking the historical rate of dividend growth. Since the start of our data, two years ago, Alexandria Group Oyj has lifted its dividend by approximately 12% a year on average. Both per-share earnings and dividends have both been growing rapidly in recent times, which is great to see.

To Sum It Up

From a dividend perspective, should investors buy or avoid Alexandria Group Oyj? Alexandria Group Oyj has been generating credible earnings per share growth, although its dividend payments were not adequately covered by earnings. We're unconvinced on the company's merits, and think there might be better opportunities out there.

With that being said, if dividends aren't your biggest concern with Alexandria Group Oyj, you should know about the other risks facing this business. For example, Alexandria Group Oyj has 2 warning signs (and 1 which is a bit unpleasant) we think you should know about.

If you're in the market for strong dividend payers, we recommend checking our selection of top 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.