Only Four Days Left To Cash In On BASSAC Société anonyme's (EPA:BASS) Dividend

Readers hoping to buy BASSAC Société anonyme (EPA:BASS) for its dividend will need to make their move shortly, as the stock is about to trade ex-dividend. The ex-dividend date is usually set to be one business day before the record date which is the cut-off date on which you must be present on the company's books as a shareholder in order to receive the 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. Therefore, if you purchase BASSAC Société anonyme's shares on or after the 19th of May, you won't be eligible to receive the dividend, when it is paid on the 12th of June.

The company's next dividend payment will be €2.50 per share, on the back of last year when the company paid a total of €2.50 to shareholders. Based on the last year's worth of payments, BASSAC Société anonyme stock has a trailing yield of around 4.9% on the current share price of €51. 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! As a result, readers should always check whether BASSAC Société anonyme has been able to grow its dividends, or if the dividend might be cut.

View our latest analysis for BASSAC Société anonyme

If a company pays out more in dividends than it earned, then the dividend might become unsustainable - hardly an ideal situation. BASSAC Société anonyme paid out a comfortable 39% 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 104% of its free cash flow in the form of dividends last year, which is outside the comfort zone for most businesses. Companies usually need cash more than they need earnings - expenses don't pay themselves - so it's not great to see it paying out so much of its cash flow.

BASSAC Société anonyme paid out less in dividends than it reported in profits, but unfortunately it didn't generate enough cash to cover the dividend. Cash is king, as they say, and were BASSAC Société anonyme to repeatedly pay dividends that aren't well covered by cashflow, we would consider this a warning sign.

Click here to see how much of its profit BASSAC Société anonyme 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. With that in mind, we're encouraged by the steady growth at BASSAC Société anonyme, with earnings per share up 4.3% on average over the last five years. Earnings have been growing somewhat, but we're concerned dividend payments consumed most of the company's cash flow over the past year.

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, 10 years ago, BASSAC Société anonyme has lifted its dividend by approximately 15% a year on average. 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

From a dividend perspective, should investors buy or avoid BASSAC Société anonyme? BASSAC Société anonyme has seen its earnings per share grow steadily and paid out less than half its profit over the last year. Unfortunately, its dividend was not well covered by free cash flow. In summary, it's hard to get excited about BASSAC Société anonyme from a dividend perspective.

With that being said, if dividends aren't your biggest concern with BASSAC Société anonyme, you should know about the other risks facing this business. We've identified 3 warning signs with BASSAC Société anonyme (at least 1 which doesn't sit too well with us), and understanding them should be part of your investment process.

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.