Should You Buy Jungle21, S.A. (EPA:MLJ21) For Its Upcoming Dividend?

Readers hoping to buy Jungle21, S.A. (EPA:MLJ21) for its dividend will need to make their move shortly, as the stock is about to trade ex-dividend. The ex-dividend date generally occurs two days before the record date, which is the day on which shareholders need to be on the company's books in order 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. Accordingly, Jungle21 investors that purchase the stock on or after the 21st of May will not receive the dividend, which will be paid on the 23rd of May.

The company's next dividend payment will be €0.1691566 per share. Last year, in total, the company distributed €0.11 to shareholders. Looking at the last 12 months of distributions, Jungle21 has a trailing yield of approximately 3.1% on its current stock price of €3.50. 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 investigate whether Jungle21 can afford its dividend, and if the dividend could grow.

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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. Jungle21 is paying out an acceptable 72% of its profit, a common payout level among most companies.

Check out our latest analysis for Jungle21

Click here to see how much of its profit Jungle21 paid out over the last 12 months.

Have Earnings And Dividends Been Growing?

Companies that aren't growing their earnings can still be valuable, but it is even more important to assess the sustainability of the dividend if it looks like the company will struggle to grow. Investors love dividends, so if earnings fall and the dividend is reduced, expect a stock to be sold off heavily at the same time. To our modest chagrin, Jungle21 earnings per share have been effectively flat over the past year. Growth is a prerequisite for an outstanding dividend company over the long term, but we wouldn't read too much into flat numbers over any one year time frame.

Given that Jungle21 has only been paying a dividend for a year, there's not much of a past history to draw insight from.

To Sum It Up

Should investors buy Jungle21 for the upcoming dividend? Earnings per share have been flat and Jungle21's dividend payouts are within reasonable limits; without a sharp decline in earnings we feel that the dividend is likely somewhat sustainable. All things considered, we are not particularly enthused about Jungle21 from a dividend perspective.

However if you're still interested in Jungle21 as a potential investment, you should definitely consider some of the risks involved with Jungle21. To that end, you should learn about the 3 warning signs we've spotted with Jungle21 (including 1 which doesn't sit too well with us).

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.