Read This Before Considering CIAK Grupa d.d. (ZGSE:CIAK) For Its Upcoming €0.23 Dividend

It looks like CIAK Grupa d.d. (ZGSE:CIAK) is about to go ex-dividend in the next four days. The ex-dividend date is usually set to be two business days 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 of consequence because whenever a stock is bought or sold, the trade can take two business days or more to settle. Thus, you can purchase CIAK Grupa d.d's shares before the 23rd of June in order to receive the dividend, which the company will pay on the 17th of July.

The company's next dividend payment will be €0.23 per share. Last year, in total, the company distributed €0.23 to shareholders. Looking at the last 12 months of distributions, CIAK Grupa d.d has a trailing yield of approximately 3.7% on its current stock price of €6.25. 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! As a result, readers should always check whether CIAK Grupa d.d has been able to grow its dividends, or if the dividend might be cut.

Trump has pledged to "unleash" American oil and gas and these 15 US stocks have developments that are poised to benefit.

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. CIAK Grupa d.d paid out a comfortable 49% of its profit last year. Yet cash flows are even more important than profits for assessing a dividend, so we need to see if the company generated enough cash to pay its distribution. It paid out an unsustainably high 289% of its free cash flow as dividends over the past 12 months, which is worrying. It's pretty hard to pay out more than you earn, so we wonder how CIAK Grupa d.d intends to continue funding this dividend, or if it could be forced to cut the payment.

CIAK Grupa d.d paid out less in dividends than it reported in profits, but unfortunately it didn't generate enough cash to cover the dividend. Cash is king, as they say, and were CIAK Grupa d.d to repeatedly pay dividends that aren't well covered by cashflow, we would consider this a warning sign.

See our latest analysis for CIAK Grupa d.d

Click here to see how much of its profit CIAK Grupa 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. Investors love dividends, so if earnings fall and the dividend is reduced, expect a stock to be sold off heavily at the same time. This is why it's a relief to see CIAK Grupa d.d earnings per share are up 10.0% per annum over the last five years. Earnings have been growing at a steady rate, but we're concerned dividend payments consumed most of the company's cash flow over the past year.

Another key way to measure a company's dividend prospects is by measuring its historical rate of dividend growth. CIAK Grupa d.d's dividend payments are broadly unchanged compared to where they were three years ago.

The Bottom Line

Is CIAK Grupa d.d an attractive dividend stock, or better left on the shelf? CIAK Grupa d.d delivered reasonable earnings per share growth in recent times, and paid out less than half its profits and 289% of its cash flow over the last year, which is a mediocre outcome. Overall we're not hugely bearish on the stock, but there are likely better dividend investments out there.

With that being said, if dividends aren't your biggest concern with CIAK Grupa d.d, you should know about the other risks facing this business. To that end, you should learn about the 4 warning signs we've spotted with CIAK Grupa d.d (including 2 which are potentially serious).

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.