Gérard Perrier Industrie S.A. (EPA:PERR) Goes Ex-Dividend Soon

Regular readers will know that we love our dividends at Simply Wall St, which is why it's exciting to see Gérard Perrier Industrie S.A. (EPA:PERR) is about to trade ex-dividend in the next 3 days. 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 important as the process of settlement involves two full business days. So if you miss that date, you would not show up on the company's books on the record date. Thus, you can purchase Gérard Perrier Industrie's shares before the 10th of June in order to receive the dividend, which the company will pay on the 12th of June.

The company's upcoming dividend is €2.30 a share, following on from the last 12 months, when the company distributed a total of €2.30 per share to shareholders. Based on the last year's worth of payments, Gérard Perrier Industrie has a trailing yield of 2.4% on the current stock price of €94.40. Dividends are a major contributor to investment returns for long term holders, but only if the dividend continues to be paid. As a result, readers should always check whether Gérard Perrier Industrie has been able to grow its dividends, or if the dividend might be cut.

See our latest analysis for Gérard Perrier Industrie

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. Gérard Perrier Industrie paid out a comfortable 44% of its profit last year. That said, even highly profitable companies sometimes might not generate enough cash to pay the dividend, which is why we should always check if the dividend is covered by cash flow. It paid out more than half (74%) of its free cash flow in the past year, which is within an average range for most companies.

It's encouraging to see that the dividend is covered by both profit and cash flow. This generally suggests the dividend is sustainable, as long as earnings don't drop precipitously.

Click here to see how much of its profit Gérard Perrier Industrie paid out over the last 12 months.

Have Earnings And Dividends Been Growing?

Stocks in companies that generate sustainable earnings growth often make the best dividend prospects, as it is easier to lift the dividend when earnings are rising. If earnings decline and the company is forced to cut its dividend, investors could watch the value of their investment go up in smoke. This is why it's a relief to see Gérard Perrier Industrie earnings per share are up 7.8% per annum over the last five years. Decent historical earnings per share growth suggests Gérard Perrier Industrie has been effectively growing value for shareholders. However, it's now paying out more than half its earnings as dividends. If management lifts the payout ratio further, we'd take this as a tacit signal that the company's growth prospects are slowing.

Another key way to measure a company's dividend prospects is by measuring its historical rate of dividend growth. Gérard Perrier Industrie has delivered 13% dividend growth per year on average over the past 10 years. We're glad to see dividends rising alongside earnings over a number of years, which may be a sign the company intends to share the growth with shareholders.

The Bottom Line

Should investors buy Gérard Perrier Industrie for the upcoming dividend? Earnings per share have been growing at a steady rate, and Gérard Perrier Industrie paid out less than half its profits and more than half its free cash flow as dividends over the last year. To summarise, Gérard Perrier Industrie looks okay on this analysis, although it doesn't appear a stand-out opportunity.

Want to learn more about Gérard Perrier Industrie's dividend performance? Check out this visualisation of its historical revenue and earnings growth.

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.