Only Three Days Left To Cash In On HITECHPROS Société anonyme's (EPA:ALHIT) Dividend

Regular readers will know that we love our dividends at Simply Wall St, which is why it's exciting to see HITECHPROS Société anonyme (EPA:ALHIT) is about to trade ex-dividend in the next three days. The ex-dividend date is one business day before a company's record date, which is the date on which the company determines which shareholders are entitled to receive a dividend. The ex-dividend date is of consequence because whenever a stock is bought or sold, the trade takes at least two business day to settle. Meaning, you will need to purchase HITECHPROS Société anonyme's shares before the 5th of September to receive the dividend, which will be paid on the 7th of September.

The upcoming dividend for HITECHPROS Société anonyme is €1.25 per share, increased from last year's total dividends per share of €1.00. If you buy this business for its dividend, you should have an idea of whether HITECHPROS Société anonyme's dividend is reliable and sustainable. We need to see whether the dividend is covered by earnings and if it's growing.

Check out our latest analysis for HITECHPROS Société anonyme

Dividends are usually paid out of company profits, so if a company pays out more than it earned then its dividend is usually at greater risk of being cut. It paid out 79% 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 worried about the risk of a drop in earnings.

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?

Stocks with flat earnings can still be attractive dividend payers, but it is important to be more conservative with your approach and demand a greater margin for safety when it comes to dividend sustainability. If business enters a downturn and the dividend is cut, the company could see its value fall precipitously. To our modest chagrin, HITECHPROS Société anonyme 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.

We do note though, one year is too short a time to be drawing strong conclusions about a company's future growth prospects.

Another key way to measure a company's dividend prospects is by measuring its historical rate of dividend growth. HITECHPROS Société anonyme has delivered an average of 8.8% per year annual increase in its dividend, based on the past 10 years of dividend payments.

Final Takeaway

From a dividend perspective, should investors buy or avoid HITECHPROS Société anonyme? HITECHPROS Société anonyme has been struggling to generate growth while also paying out more than half of its earnings to shareholders as dividends. In sum this is a middling combination, and we find it hard to get excited about the company from a dividend perspective.

However if you're still interested in HITECHPROS Société anonyme as a potential investment, you should definitely consider some of the risks involved with HITECHPROS Société anonyme. Be aware that HITECHPROS Société anonyme is showing 3 warning signs in our investment analysis, and 1 of those 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.