Be Sure To Check Out Wulff-Yhtiöt Oyj (HEL:WUF1V) Before It Goes Ex-Dividend

Regular readers will know that we love our dividends at Simply Wall St, which is why it's exciting to see Wulff-Yhtiöt Oyj (HEL:WUF1V) is about to trade ex-dividend in the next four 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. 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. This means that investors who purchase Wulff-Yhtiöt Oyj's shares on or after the 5th of April will not receive the dividend, which will be paid on the 15th of April.

The company's upcoming dividend is €0.08 a share, following on from the last 12 months, when the company distributed a total of €0.15 per share to shareholders. Based on the last year's worth of payments, Wulff-Yhtiöt Oyj stock has a trailing yield of around 5.9% on the current share price of €2.56. If you buy this business for its dividend, you should have an idea of whether Wulff-Yhtiöt Oyj's dividend is reliable and sustainable. So we need to investigate whether Wulff-Yhtiöt Oyj can afford its dividend, and if the dividend could grow.

See our latest analysis for Wulff-Yhtiöt Oyj

Dividends are typically paid from company earnings. If a company pays more in dividends than it earned in profit, then the dividend could be unsustainable. Wulff-Yhtiöt Oyj paid out a comfortable 49% of its profit last year. Yet cash flow is typically more important than profit for assessing dividend sustainability, so we should always check if the company generated enough cash to afford its dividend. Fortunately, it paid out only 33% of its free cash flow in the past year.

It's positive to see that Wulff-Yhtiöt Oyj's dividend is covered by both profits and cash flow, since this is generally a sign that the dividend is sustainable, and a lower payout ratio usually suggests a greater margin of safety before the dividend gets cut.

Click here to see how much of its profit Wulff-Yhtiöt Oyj paid out over the last 12 months.

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. If earnings decline and the company is forced to cut its dividend, investors could watch the value of their investment go up in smoke. Fortunately for readers, Wulff-Yhtiöt Oyj's earnings per share have been growing at 15% a year for the past five years. The company has managed to grow earnings at a rapid rate, while reinvesting most of the profits within the business. This will make it easier to fund future growth efforts and we think this is an attractive combination - plus the dividend can always be increased later.

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, eight years ago, Wulff-Yhtiöt Oyj has lifted its dividend by approximately 5.2% a year on average. Earnings per share have been growing much quicker than dividends, potentially because Wulff-Yhtiöt Oyj is keeping back more of its profits to grow the business.

To Sum It Up

From a dividend perspective, should investors buy or avoid Wulff-Yhtiöt Oyj? Wulff-Yhtiöt Oyj has grown its earnings per share while simultaneously reinvesting in the business. Unfortunately it's cut the dividend at least once in the past eight years, but the conservative payout ratio makes the current dividend look sustainable. Overall we think this is an attractive combination and worthy of further research.

While it's tempting to invest in Wulff-Yhtiöt Oyj for the dividends alone, you should always be mindful of the risks involved. For example, we've found 4 warning signs for Wulff-Yhtiöt Oyj that we recommend you consider before investing in the business.

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.