Petros Petropoulos AEBE (ATH:PETRO) Goes Ex-Dividend Soon

Some investors rely on dividends for growing their wealth, and if you're one of those dividend sleuths, you might be intrigued to know that Petros Petropoulos AEBE (ATH:PETRO) is about to go ex-dividend in just 4 days. The ex-dividend date generally occurs two days before the record date, which is the day on which shareholders need to be on the company's books in order to receive a dividend. The ex-dividend date is of consequence because whenever a stock is bought or sold, the trade can take two business days or more to settle. Therefore, if you purchase Petros Petropoulos AEBE's shares on or after the 11th of July, you won't be eligible to receive the dividend, when it is paid on the 18th of July.

The company's next dividend payment will be €0.30 per share. Last year, in total, the company distributed €0.86 to shareholders. Based on the last year's worth of payments, Petros Petropoulos AEBE stock has a trailing yield of around 9.3% on the current share price of €9.30. Dividends are an important source of income to many shareholders, but the health of the business is crucial to maintaining those dividends. So we need to check whether the dividend payments are covered, and if earnings are 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. Petros Petropoulos AEBE is paying out an acceptable 72% of its profit, a common payout level among most companies. Yet cash flows are even more important than profits for assessing a dividend, so we need to see if the company generated enough cash to pay its distribution. Over the last year it paid out 63% of its free cash flow as dividends, within the usual range for most companies.

It's encouraging to see that the dividend is covered by both profit and cash flow. This generally suggests the dividend is sustainable, as long as earnings don't drop precipitously.

View our latest analysis for Petros Petropoulos AEBE

Click here to see how much of its profit Petros Petropoulos AEBE 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 earnings fall far enough, the company could be forced to cut its dividend. That's why it's comforting to see Petros Petropoulos AEBE's earnings have been skyrocketing, up 26% per annum for the past five years. Management appears to be striking a nice balance between reinvesting for growth and paying dividends to shareholders. With a reasonable payout ratio, profits being reinvested, and some earnings growth, Petros Petropoulos AEBE could have strong prospects for future increases to the dividend.

Many investors will assess a company's dividend performance by evaluating how much the dividend payments have changed over time. In the past five years, Petros Petropoulos AEBE has increased its dividend at approximately 54% a year on average. It's exciting to see that both earnings and dividends per share have grown rapidly over the past few years.

Final Takeaway

Is Petros Petropoulos AEBE an attractive dividend stock, or better left on the shelf? Higher earnings per share generally lead to higher dividends from dividend-paying stocks over the long run. That's why we're glad to see Petros Petropoulos AEBE's earnings per share growing, although as we saw, the company is paying out more than half of its earnings and cashflow - 72% and 63% respectively. All things considered, we are not particularly enthused about Petros Petropoulos AEBE from a dividend perspective.

In light of that, while Petros Petropoulos AEBE has an appealing dividend, it's worth knowing the risks involved with this stock. For example - Petros Petropoulos AEBE has 1 warning sign we think you should be aware of.

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.