Interested In Thrace Plastics Holding's (ATH:PLAT) Upcoming €0.069 Dividend? You Have Three Days Left

Thrace Plastics Holding Company S.A. (ATH:PLAT) is about to trade ex-dividend in the next three days. The ex-dividend date is usually set to be one business day before the record date which is the cut-off date on which you must be present on the company's books as a shareholder in order to receive the dividend. The ex-dividend date is an important date to be aware of as any purchase of the stock made on or after this date might mean a late settlement that doesn't show on the record date. Therefore, if you purchase Thrace Plastics Holding's shares on or after the 30th of November, you won't be eligible to receive the dividend, when it is paid on the 6th of December.

The company's next dividend payment will be €0.069 per share, and in the last 12 months, the company paid a total of €0.26 per share. Last year's total dividend payments show that Thrace Plastics Holding has a trailing yield of 6.1% on the current share price of €4.27. If you buy this business for its dividend, you should have an idea of whether Thrace Plastics Holding's dividend is reliable and sustainable. As a result, readers should always check whether Thrace Plastics Holding has been able to grow its dividends, or if the dividend might be cut.

See our latest analysis for Thrace Plastics Holding

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. Its dividend payout ratio is 79% of profit, which means the company is paying out a majority of its earnings. The relatively limited profit reinvestment could slow the rate of future earnings growth. We'd be worried about the risk of a drop in earnings. A useful secondary check can be to evaluate whether Thrace Plastics Holding generated enough free cash flow to afford its dividend. Dividends consumed 55% of the company's free cash flow last year, which is within a normal range for most dividend-paying organisations.

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.

Click here to see how much of its profit Thrace Plastics Holding 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. Investors love dividends, so if earnings fall and the dividend is reduced, expect a stock to be sold off heavily at the same time. With that in mind, we're encouraged by the steady growth at Thrace Plastics Holding, with earnings per share up 6.7% on average over the last five years. Decent historical earnings per share growth suggests Thrace Plastics Holding has been effectively growing value for shareholders. However, it's now paying out more than half its earnings as dividends. If management lifts the payout ratio further, we'd take this as a tacit signal that the company's growth prospects are slowing.

Many investors will assess a company's dividend performance by evaluating how much the dividend payments have changed over time. Thrace Plastics Holding has delivered 19% dividend growth per year on average over the past 10 years. 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.

To Sum It Up

Is Thrace Plastics Holding worth buying for its dividend? Earnings per share have been growing modestly and Thrace Plastics Holding paid out a bit over half of its earnings and free cash flow last year. While it does have some good things going for it, we're a bit ambivalent and it would take more to convince us of Thrace Plastics Holding's dividend merits.

If you want to look further into Thrace Plastics Holding, it's worth knowing the risks this business faces. Our analysis shows 2 warning signs for Thrace Plastics Holding and you should be aware of them before buying any shares.

If you're in the market for strong dividend payers, we recommend checking our selection of top 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.