Hrvatska postanska banka d.d (ZGSE:HPB) Could Be A Buy For Its Upcoming Dividend

Hrvatska postanska banka d.d. (ZGSE:HPB) stock is about to trade ex-dividend in 3 days. Typically, the ex-dividend date is one business day before the record date which is the date on which a company determines the shareholders eligible 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. This means that investors who purchase Hrvatska postanska banka d.d's shares on or after the 23rd of December will not receive the dividend, which will be paid on the 7th of January.

The company's upcoming dividend is €23.90 a share, following on from the last 12 months, when the company distributed a total of €23.90 per share to shareholders. Looking at the last 12 months of distributions, Hrvatska postanska banka d.d has a trailing yield of approximately 7.2% on its current stock price of €330.00. If you buy this business for its dividend, you should have an idea of whether Hrvatska postanska banka d.d's dividend is reliable and sustainable. So we need to investigate whether Hrvatska postanska banka d.d can afford its dividend, and if the dividend could grow.

View our latest analysis for Hrvatska postanska banka d.d

Dividends are typically paid out of company income, so if a company pays out more than it earned, its dividend is usually at a higher risk of being cut. Hrvatska postanska banka d.d paid out more than half (58%) of its earnings last year, which is a regular payout ratio for most companies.

When a company paid out less in dividends than it earned in profit, this generally suggests its dividend is affordable. The lower the % of its profit that it pays out, the greater the margin of safety for the dividend if the business enters a downturn.

Click here to see how much of its profit Hrvatska postanska banka d.d 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 fall far enough, the company could be forced to cut its dividend. It's encouraging to see Hrvatska postanska banka d.d has grown its earnings rapidly, up 29% 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. In the last nine years, Hrvatska postanska banka d.d has lifted its dividend by approximately 32% 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

From a dividend perspective, should investors buy or avoid Hrvatska postanska banka d.d? Earnings per share are growing at an attractive rate, and Hrvatska postanska banka d.d is paying out a bit over half its profits. We think this is a pretty attractive combination, and would be interested in investigating Hrvatska postanska banka d.d more closely.

While it's tempting to invest in Hrvatska postanska banka d.d for the dividends alone, you should always be mindful of the risks involved. For example, we've found 1 warning sign for Hrvatska postanska banka d.d that we recommend you consider before investing in the business.

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.