Is It Worth Considering Compagnie Lebon (EPA:ALBON) For Its Upcoming Dividend?

Readers hoping to buy Compagnie Lebon (EPA:ALBON) for its dividend will need to make their move shortly, as the stock is about to trade ex-dividend. The ex-dividend date is commonly two business days before the record date, which is the cut-off date for shareholders to be present on the company's books to be eligible for a dividend payment. The ex-dividend date is of consequence because whenever a stock is bought or sold, the trade can take two business days or more to settle. In other words, investors can purchase Compagnie Lebon's shares before the 29th of May in order to be eligible for the dividend, which will be paid on the 2nd of June.

The company's next dividend payment will be €3.00 per share, and in the last 12 months, the company paid a total of €3.50 per share. Calculating the last year's worth of payments shows that Compagnie Lebon has a trailing yield of 3.8% on the current share price of €92.20. If you buy this business for its dividend, you should have an idea of whether Compagnie Lebon's dividend is reliable and sustainable. We need to see whether the dividend is covered by earnings and if it's growing.

We've discovered 2 warning signs about Compagnie Lebon. View them for free.

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. Compagnie Lebon's dividend is not well covered by earnings, as the company lost money last year. This is not a sustainable state of affairs, so it would be worth investigating if earnings are expected to recover.

Check out our latest analysis for Compagnie Lebon

Click here to see how much of its profit Compagnie Lebon 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. Compagnie Lebon reported a loss last year, but at least the general trend suggests its income has been improving over the past five years. Even so, an unprofitable company whose business does not quickly recover is usually not a good candidate for dividend investors.

The main way most investors will assess a company's dividend prospects is by checking the historical rate of dividend growth. Compagnie Lebon has seen its dividend decline 0.8% per annum on average over the past 10 years, which is not great to see.

We update our analysis on Compagnie Lebon every 24 hours, so you can always get the latest insights on its financial health, here.

To Sum It Up

Is Compagnie Lebon an attractive dividend stock, or better left on the shelf? We're a bit uncomfortable with it paying a dividend while being loss-making. It doesn't appear an outstanding opportunity, but could be worth a closer look.

If you want to look further into Compagnie Lebon, it's worth knowing the risks this business faces. For instance, we've identified 2 warning signs for Compagnie Lebon (1 is a bit concerning) you should be aware of.

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.