Don't Buy Antin Infrastructure Partners SAS (EPA:ANTIN) For Its Next Dividend Without Doing These Checks

Antin Infrastructure Partners SAS (EPA:ANTIN) is about to trade ex-dividend in the next three 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. In other words, investors can purchase Antin Infrastructure Partners SAS' shares before the 17th of June in order to be eligible for the dividend, which will be paid on the 19th of June.

The company's next dividend payment will be €0.39 per share. Last year, in total, the company distributed €0.78 to shareholders. Calculating the last year's worth of payments shows that Antin Infrastructure Partners SAS has a trailing yield of 5.2% on the current share price of €12.20. If you buy this business for its dividend, you should have an idea of whether Antin Infrastructure Partners SAS's dividend is reliable and sustainable. So we need to check whether the dividend payments are covered, and if earnings are growing.

See our latest analysis for Antin Infrastructure Partners SAS

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. Antin Infrastructure Partners SAS paid out 167% of profit in the past year, which we think is typically not sustainable unless there are mitigating characteristics such as unusually strong cash flow or a large cash balance.

Generally, the higher a company's payout ratio, the more the dividend is at risk of being reduced.

Click here to see the company's payout ratio, plus analyst estimates of its future dividends.

Have Earnings And Dividends Been Growing?

Businesses with shrinking earnings are tricky from a dividend perspective. If earnings fall far enough, the company could be forced to cut its dividend. Readers will understand then, why we're concerned to see Antin Infrastructure Partners SAS's earnings per share have dropped 11% a year over the past three years. Ultimately, when earnings per share decline, the size of the pie from which dividends can be paid, shrinks.

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, Antin Infrastructure Partners SAS has lifted its dividend by approximately 141% a year on average. The only way to pay higher dividends when earnings are shrinking is either to pay out a larger percentage of profits, spend cash from the balance sheet, or borrow the money. Antin Infrastructure Partners SAS is already paying out 167% of its profits, and with shrinking earnings we think it's unlikely that this dividend will grow quickly in the future.

To Sum It Up

Is Antin Infrastructure Partners SAS an attractive dividend stock, or better left on the shelf? Earnings per share are in decline and Antin Infrastructure Partners SAS is paying out what we feel is an uncomfortably high percentage of its profit as dividends. Generally we think dividend investors should avoid businesses in this situation, as high payout ratios and declining earnings can lead to the dividend being cut. This is not an overtly appealing combination of characteristics, and we're just not that interested in this company's dividend.

Although, if you're still interested in Antin Infrastructure Partners SAS and want to know more, you'll find it very useful to know what risks this stock faces. Our analysis shows 3 warning signs for Antin Infrastructure Partners SAS that we strongly recommend you have a look at before investing in the company.

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.