Athens Medical C.S.A. (ATH:IATR) Looks Interesting, And It's About To Pay A Dividend

Athens Medical C.S.A. (ATH:IATR) stock is about to trade ex-dividend in 3 days. The ex-dividend date occurs one day 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 takes at least two business day to settle. Accordingly, Athens Medical C.S.A investors that purchase the stock on or after the 7th of September will not receive the dividend, which will be paid on the 14th of September.

The company's upcoming dividend is €0.03 a share, following on from the last 12 months, when the company distributed a total of €0.07 per share to shareholders. Based on the last year's worth of payments, Athens Medical C.S.A has a trailing yield of 3.6% on the current stock price of €1.965. 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.

View our latest analysis for Athens Medical C.S.A

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. Athens Medical C.S.A is paying out an acceptable 71% of its profit, a common payout level among most companies. Athens Medical C.S.A paid a dividend despite reporting negative free cash flow over the last twelve months. This may be due to heavy investment in the business, but this is still suboptimal from a dividend sustainability perspective.

Click here to see how much of its profit Athens Medical C.S.A 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 decline and the company is forced to cut its dividend, investors could watch the value of their investment go up in smoke. That's why it's comforting to see Athens Medical C.S.A's earnings have been skyrocketing, up 21% per annum for the past five years.

Unfortunately Athens Medical C.S.A has only been paying a dividend for a year or so, so there's not much of a history to draw insight from.

To Sum It Up

Should investors buy Athens Medical C.S.A for the upcoming dividend? Athens Medical C.S.A has an acceptable payout ratio and its earnings per share have been improving at a decent rate. We think this is a pretty attractive combination, and would be interested in investigating Athens Medical C.S.A more closely.

So while Athens Medical C.S.A looks good from a dividend perspective, it's always worthwhile being up to date with the risks involved in this stock. To that end, you should learn about the 3 warning signs we've spotted with Athens Medical C.S.A (including 1 which is a bit unpleasant).

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.