Why You Might Be Interested In Groupe LDLC société anonyme (EPA:ALLDL) For Its Upcoming Dividend

Regular readers will know that we love our dividends at Simply Wall St, which is why it's exciting to see Groupe LDLC société anonyme (EPA:ALLDL) is about to trade ex-dividend in the next 4 days. You will need to purchase shares before the 23rd of February to receive the dividend, which will be paid on the 25th of February.

Groupe LDLC société anonyme's next dividend payment will be €0.50 per share. Last year, in total, the company distributed €1.00 to shareholders. Based on the last year's worth of payments, Groupe LDLC société anonyme has a trailing yield of 1.7% on the current stock price of €58.8. 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 Groupe LDLC société anonyme has been able to grow its dividends, or if the dividend might be cut.

View our latest analysis for Groupe LDLC société anonyme

Dividends are typically paid from company earnings. If a company pays more in dividends than it earned in profit, then the dividend could be unsustainable. Groupe LDLC société anonyme is paying out just 19% of its profit after tax, which is comfortably low and leaves plenty of breathing room in the case of adverse events. Groupe LDLC société anonyme paid a dividend despite reporting negative free cash flow last year. That's typically a bad combination and - if this were more than a one-off - not sustainable.

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

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 business enters a downturn and the dividend is cut, the company could see its value fall precipitously. With that in mind, we're encouraged by the steady growth at Groupe LDLC société anonyme, with earnings per share up 4.2% on average over the last five years.

Another key way to measure a company's dividend prospects is by measuring its historical rate of dividend growth. Groupe LDLC société anonyme has delivered an average of 17% per year annual increase in its dividend, based on the past 10 years of dividend payments. It's encouraging to see the company lifting dividends while earnings are growing, suggesting at least some corporate interest in rewarding shareholders.

Final Takeaway

Is Groupe LDLC société anonyme an attractive dividend stock, or better left on the shelf? Groupe LDLC société anonyme has seen its earnings per share grow slowly in recent years, and the company reinvests more than half of its profits in the business, which generally bodes well for its future prospects. Groupe LDLC société anonyme ticks a lot of boxes for us from a dividend perspective, and we think these characteristics should mark the company as deserving of further attention.

While it's tempting to invest in Groupe LDLC société anonyme for the dividends alone, you should always be mindful of the risks involved. We've identified 4 warning signs with Groupe LDLC société anonyme (at least 1 which is a bit unpleasant), and understanding these should be part of your investment process.

If you're in the market for dividend stocks, we recommend checking our list of top dividend stocks with a greater than 2% yield and an upcoming dividend.

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This article by Simply Wall St is general in nature. 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.
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