Should You Buy Agram banka d.d. (ZGSE:KBZ) For Its Upcoming Dividend?

It looks like Agram banka d.d. (ZGSE:KBZ) is about to go ex-dividend in the next four days. The ex-dividend date is one business day before a company's record date, which is the date on which the company determines which shareholders are entitled to receive a dividend. The ex-dividend date is important as the process of settlement involves two full business days. So if you miss that date, you would not show up on the company's books on the record date. In other words, investors can purchase Agram banka d.d's shares before the 20th of June in order to be eligible for the dividend, which will be paid on the 14th of July.

The company's upcoming dividend is €1.55 a share, following on from the last 12 months, when the company distributed a total of €1.55 per share to shareholders. Based on the last year's worth of payments, Agram banka d.d has a trailing yield of 5.3% on the current stock price of €29. We love seeing companies pay a dividend, but it's also important to be sure that laying the golden eggs isn't going to kill our golden goose! We need to see whether the dividend is covered by earnings and if it's growing.

View our latest analysis for Agram banka 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. Agram banka d.d is paying out an acceptable 51% of its profit, a common payout level among 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 Agram banka 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. Fortunately for readers, Agram banka d.d's earnings per share have been growing at 16% a year for the past five years.

Unfortunately Agram banka d.d has only been paying a dividend for a year or so, so there's not much of a history to draw insight from.

Final Takeaway

Should investors buy Agram banka d.d for the upcoming dividend? Agram banka d.d has an acceptable payout ratio and its earnings per share have been improving at a decent rate. Overall, Agram banka d.d looks like a promising dividend stock in this analysis, and we think it would be worth investigating further.

So while Agram banka d.d 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 4 warning signs we've spotted with Agram banka d.d (including 2 which are significant).

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.