Here's Why We're Wary Of Buying HITECHPROS Société anonyme's (EPA:ALHIT) For Its Upcoming Dividend

HITECHPROS Société anonyme (EPA:ALHIT) stock is about to trade ex-dividend in 4 days. The ex-dividend date is one business day before the record date, which is the cut-off date for shareholders to be present on the company's books to be eligible for a dividend payment. 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. Accordingly, HITECHPROS Société anonyme investors that purchase the stock on or after the 4th of September will not receive the dividend, which will be paid on the 6th of September.

The company's next dividend payment will be €1.30 per share. Last year, in total, the company distributed €1.30 to shareholders. Last year's total dividend payments show that HITECHPROS Société anonyme has a trailing yield of 7.3% on the current share price of €17.70. Dividends are a major contributor to investment returns for long term holders, but only if the dividend continues to be paid. So we need to check whether the dividend payments are covered, and if earnings are growing.

See our latest analysis for HITECHPROS Société anonyme

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. HITECHPROS Société anonyme paid out 94% of its earnings, which is more than we're comfortable with, unless there are mitigating circumstances.

Click here to see how much of its profit HITECHPROS Société anonyme 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. It's not encouraging to see that HITECHPROS Société anonyme's earnings are effectively flat over the past five years. Better than seeing them fall off a cliff, for sure, but the best dividend stocks grow their earnings meaningfully over the long run.

Many investors will assess a company's dividend performance by evaluating how much the dividend payments have changed over time. Since the start of our data, 10 years ago, HITECHPROS Société anonyme has lifted its dividend by approximately 13% a year on average.

Final Takeaway

From a dividend perspective, should investors buy or avoid HITECHPROS Société anonyme? HITECHPROS Société anonyme's earnings have barely moved in recent times, and the company is paying out a disagreeably high percentage of its earnings; a mediocre combination. 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 HITECHPROS Société anonyme and want to know more, you'll find it very useful to know what risks this stock faces. Every company has risks, and we've spotted 1 warning sign for HITECHPROS Société anonyme you should know about.

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.