Why You Might Be Interested In i2S SA (EPA:ALI2S) 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 i2S SA (EPA:ALI2S) 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 important because any transaction on a stock needs to have been settled before the record date in order to be eligible for a dividend. Meaning, you will need to purchase i2S' shares before the 30th of May to receive the dividend, which will be paid on the 3rd of June.

The company's upcoming dividend is €0.14 a share, following on from the last 12 months, when the company distributed a total of €0.14 per share to shareholders. Last year's total dividend payments show that i2S has a trailing yield of 1.8% on the current share price of €7.60. If you buy this business for its dividend, you should have an idea of whether i2S's dividend is reliable and sustainable. We need to see whether the dividend is covered by earnings and if it's growing.

See our latest analysis for i2S

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. Fortunately i2S's payout ratio is modest, at just 26% of profit.

Click here to see how much of its profit i2S paid out over the last 12 months.

Have Earnings And Dividends Been Growing?

Businesses with strong growth prospects usually make the best dividend payers, because it's easier to grow dividends when earnings per share are improving. If business enters a downturn and the dividend is cut, the company could see its value fall precipitously. It's encouraging to see i2S has grown its earnings rapidly, up 95% a year for the past five years.

The main way most investors will assess a company's dividend prospects is by checking the historical rate of dividend growth. i2S's dividend payments are broadly unchanged compared to where they were two years ago.

Final Takeaway

Should investors buy i2S for the upcoming dividend? Typically, companies that are growing rapidly and paying out a low fraction of earnings are keeping the profits for reinvestment in the business. This is one of the most attractive investment combinations under this analysis, as it can create substantial value for investors over the long run. Overall, i2S looks like a promising dividend stock in this analysis, and we think it would be worth investigating further.

In light of that, while i2S has an appealing dividend, it's worth knowing the risks involved with this stock. To help with this, we've discovered 4 warning signs for i2S that you should be aware of before investing in their shares.

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.