Les Docks des Pétroles d'Ambès -SA (EPA:DPAM) Passed Our Checks, And It's About To Pay A €51.00 Dividend

Les Docks des Pétroles d'Ambès -SA (EPA:DPAM) is about to trade ex-dividend in the next 3 days. Typically, the ex-dividend date is two business days 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 can take two business days or more to settle. In other words, investors can purchase Les Docks des Pétroles d'Ambès -SA's shares before the 25th of June in order to be eligible for the dividend, which will be paid on the 27th of June.

The company's next dividend payment will be €51.00 per share, on the back of last year when the company paid a total of €51.00 to shareholders. Based on the last year's worth of payments, Les Docks des Pétroles d'Ambès -SA stock has a trailing yield of around 5.2% on the current share price of €975.00. We love seeing companies pay a dividend, but it's also important to be sure that laying the golden eggs isn't going to kill our golden goose! So we need to check whether the dividend payments are covered, and if earnings are growing.

We've found 21 US stocks that are forecast to pay a dividend yield of over 6% next year. See the full list for free.

If a company pays out more in dividends than it earned, then the dividend might become unsustainable - hardly an ideal situation. It paid out 81% of its earnings as dividends last year, which is not unreasonable, but limits reinvestment in the business and leaves the dividend vulnerable to a business downturn. We'd be concerned if earnings began to decline. A useful secondary check can be to evaluate whether Les Docks des Pétroles d'Ambès -SA generated enough free cash flow to afford its dividend. Thankfully its dividend payments took up just 46% of the free cash flow it generated, which is a comfortable payout ratio.

It's positive to see that Les Docks des Pétroles d'Ambès -SA'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.

View our latest analysis for Les Docks des Pétroles d'Ambès -SA

Click here to see how much of its profit Les Docks des Pétroles d'Ambès -SA 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 fall far enough, the company could be forced to cut its dividend. For this reason, we're glad to see Les Docks des Pétroles d'Ambès -SA's earnings per share have risen 14% per annum over the last five years. It paid out more than three-quarters of its earnings in the last year, even though earnings per share are growing rapidly. Higher earnings generally bode well for growing dividends, although with seemingly strong growth prospects we'd wonder why management are not reinvesting more in the business.

Another key way to measure a company's dividend prospects is by measuring its historical rate of dividend growth. Les Docks des Pétroles d'Ambès -SA has delivered 13% dividend growth per year on average over the past 10 years. It's great to see earnings per share growing rapidly over several years, and dividends per share growing right along with it.

The Bottom Line

Is Les Docks des Pétroles d'Ambès -SA an attractive dividend stock, or better left on the shelf? Les Docks des Pétroles d'Ambès -SA's growing earnings per share and conservative payout ratios make for a decent combination. We also like that it paid out a lower percentage of its cash flow. Les Docks des Pétroles d'Ambès -SA looks solid on this analysis overall, and we'd definitely consider investigating it more closely.

On that note, you'll want to research what risks Les Docks des Pétroles d'Ambès -SA is facing. In terms of investment risks, we've identified 1 warning sign with Les Docks des Pétroles d'Ambès -SA and understanding them should be part of your investment process.

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.