Should You Buy Istarska kreditna banka Umag d.d. (ZGSE:IKBA) For Its Upcoming Dividend?

Regular readers will know that we love our dividends at Simply Wall St, which is why it's exciting to see Istarska kreditna banka Umag d.d. (ZGSE:IKBA) is about to trade ex-dividend in the next three 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. 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. Thus, you can purchase Istarska kreditna banka Umag d.d's shares before the 3rd of April in order to receive the dividend, which the company will pay on the 18th of April.

The company's upcoming dividend is €15.00 a share, following on from the last 12 months, when the company distributed a total of €15.00 per share to shareholders. Last year's total dividend payments show that Istarska kreditna banka Umag d.d has a trailing yield of 3.4% on the current share price of €446.00. 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 investigate whether Istarska kreditna banka Umag d.d can afford its dividend, and if the dividend could grow.

Check out our latest analysis for Istarska kreditna banka Umag d.d

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. Istarska kreditna banka Umag d.d has a low and conservative payout ratio of just 20% of its income after tax.

Generally speaking, the lower a company's payout ratios, the more resilient its dividend usually is.

Click here to see how much of its profit Istarska kreditna banka Umag d.d paid out over the last 12 months.

Have Earnings And Dividends Been Growing?

Companies with consistently growing earnings per share generally make the best dividend stocks, as they usually find it easier to grow dividends per share. If earnings fall far enough, the company could be forced to cut its dividend. That's why it's comforting to see Istarska kreditna banka Umag d.d's earnings have been skyrocketing, up 29% per annum for the past five years.

Another key way to measure a company's dividend prospects is by measuring its historical rate of dividend growth. Istarska kreditna banka Umag d.d has delivered an average of 4.9% per year annual increase in its dividend, based on the past 10 years of dividend payments. Earnings per share have been growing much quicker than dividends, potentially because Istarska kreditna banka Umag d.d is keeping back more of its profits to grow the business.

The Bottom Line

From a dividend perspective, should investors buy or avoid Istarska kreditna banka Umag d.d? Typically, companies that are growing rapidly and paying out a low fraction of earnings are keeping the profits for reinvestment in the business. Perhaps even more importantly - this can sometimes signal management is focused on the long term future of the business. Overall, Istarska kreditna banka Umag d.d looks like a promising dividend stock in this analysis, and we think it would be worth investigating further.

In light of that, while Istarska kreditna banka Umag d.d has an appealing dividend, it's worth knowing the risks involved with this stock. To help with this, we've discovered 2 warning signs for Istarska kreditna banka Umag d.d that you should be aware of before investing in their 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.