Why It Might Not Make Sense To Buy ANY Biztonsági Nyomda Nyrt. (BUSE:ANY) For Its Next Dividend

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Some investors rely on dividends for growing their wealth, and if you’re one of those dividend sleuths, you might be intrigued to know that ANY Biztonsági Nyomda Nyrt. (BUSE:ANY) is about to go ex-dividend in just 3 days. You will need to purchase shares before the 5th of July to receive the dividend, which will be paid on the 15th of July.

ANY Biztonsági Nyomda Nyrt’s next dividend payment will be Ft79.00 per share, and in the last 12 months, the company paid a total of Ft79.00 per share. Based on the last year’s worth of payments, ANY Biztonsági Nyomda Nyrt stock has a trailing yield of around 5.9% on the current share price of HUF1345. 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 ANY Biztonsági Nyomda Nyrt has been able to grow its dividends, or if the dividend might be cut.

Check out our latest analysis for ANY Biztonsági Nyomda Nyrt

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. Last year, ANY Biztonsági Nyomda Nyrt paid out 100% of its income as dividends, which is above a level that we’re comfortable with, especially if the company needs to reinvest in its business. A useful secondary check can be to evaluate whether ANY Biztonsági Nyomda Nyrt generated enough free cash flow to afford its dividend. It paid out 89% of its free cash flow as dividends, which is within usual limits but will limit the company’s ability to lift the dividend if there’s no growth.

It’s good to see that while ANY Biztonsági Nyomda Nyrt’s dividends were not well covered by profits, at least they are affordable from a cash perspective. Still, if the company continues paying out such a high percentage of its profits, the dividend could be at risk if business turns sour.

Click this link to see the company’s income payout ratio, plus what analysts are forecasting for its future payout ratio.

BUSE:ANY Historical Dividend Yield, July 1st 2019
BUSE:ANY Historical Dividend Yield, July 1st 2019

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 ANY Biztonsági Nyomda Nyrt, with earnings per share up 7.0% on average over the last five years.

Many investors will assess a company’s dividend performance by evaluating how much the dividend payments have changed over time. Since the start of our data, 10 years ago, ANY Biztonsági Nyomda Nyrt has lifted its dividend by approximately 4.1% a year on average. It’s encouraging to see the company lifting dividends while earnings are growing, suggesting at least some corporate interest in rewarding shareholders.

The Bottom Line

Is ANY Biztonsági Nyomda Nyrt worth buying for its dividend? While earnings per share have been growing slowly, ANY Biztonsági Nyomda Nyrt is paying out an uncomfortably high percentage of its earnings. However it did pay out a lower percentage of its cashflow. Overall it doesn’t look like the most suitable dividend stock for a long-term buy and hold investor.

Curious what other investors think of ANY Biztonsági Nyomda Nyrt? See what analysts are forecasting, with this visualisation of its historical and future estimated earnings and cash flow .

A common investment mistake is buying the first interesting stock you see. Here you can find a list of promising dividend stocks with a greater than 2% yield and an upcoming dividend.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.