Why You Might Be Interested In TXCOM Société Anonyme (EPA:ALTXC) For Its Upcoming Dividend

TXCOM Société Anonyme (EPA:ALTXC) stock is about to trade ex-dividend in 3 days. Typically, the ex-dividend date is two business days before the record date, which is the date on which a company determines the shareholders eligible to receive a dividend. It is important to be aware of the ex-dividend date because any trade on the stock needs to have been settled on or before the record date. In other words, investors can purchase TXCOM Société Anonyme's shares before the 16th of July in order to be eligible for the dividend, which will be paid on the 18th of July.

The company's next dividend payment will be €0.35 per share, on the back of last year when the company paid a total of €0.35 to shareholders. Calculating the last year's worth of payments shows that TXCOM Société Anonyme has a trailing yield of 3.6% on the current share price of €9.85. If you buy this business for its dividend, you should have an idea of whether TXCOM Société Anonyme's dividend is reliable and sustainable. We need to see whether the dividend is covered by earnings and if it's growing.

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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. That's why it's good to see TXCOM Société Anonyme paying out a modest 39% of its earnings.

See our latest analysis for TXCOM Société Anonyme

Click here to see how much of its profit TXCOM 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 TXCOM Société Anonyme, with earnings per share up 2.5% on average over the last five years. Recent earnings growth has been limited. Yet there are several ways to grow the dividend, and one of them is simply that the company may choose to pay out more of its earnings as dividends.

Another key way to measure a company's dividend prospects is by measuring its historical rate of dividend growth. In the last four years, TXCOM Société Anonyme has lifted its dividend by approximately 22% 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.

Final Takeaway

Should investors buy TXCOM Société Anonyme for the upcoming dividend? It has been growing its earnings per share somewhat in recent years, although it reinvests more than half its earnings in the business, which could suggest there are some growth projects that have not yet reached fruition. In summary, TXCOM Société Anonyme appears to have some promise as a dividend stock, and we'd suggest taking a closer look at it.

While it's tempting to invest in TXCOM Société Anonyme for the dividends alone, you should always be mindful of the risks involved. In terms of investment risks, we've identified 1 warning sign with TXCOM Société Anonyme and understanding them should be part of your investment process.

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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.