Don't Race Out To Buy Zwack Unicum Nyrt. (BUSE:ZWACK) Just Because It's Going Ex-Dividend

Regular readers will know that we love our dividends at Simply Wall St, which is why it's exciting to see Zwack Unicum Nyrt. (BUSE:ZWACK) is about to trade ex-dividend in the next 3 days. Ex-dividend means that investors that purchase the stock on or after the 19th of January will not receive this dividend, which will be paid on the 27th of January.

Zwack Unicum Nyrt's upcoming dividend is Ft300 a share, following on from the last 12 months, when the company distributed a total of Ft300 per share to shareholders. Based on the last year's worth of payments, Zwack Unicum Nyrt stock has a trailing yield of around 1.8% on the current share price of HUF16950. 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! That's why we should always check whether the dividend payments appear sustainable, and if the company is growing.

See our latest analysis for Zwack Unicum 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. Zwack Unicum Nyrt paid out a comfortable 36% of its profit last year. That said, even highly profitable companies sometimes might not generate enough cash to pay the dividend, which is why we should always check if the dividend is covered by cash flow.

Click here to see how much of its profit Zwack Unicum Nyrt paid out over the last 12 months.

Have Earnings And Dividends Been Growing?

Companies that aren't growing their earnings can still be valuable, but it is even more important to assess the sustainability of the dividend if it looks like the company will struggle to grow. If business enters a downturn and the dividend is cut, the company could see its value fall precipitously. That explains why we're not overly excited about Zwack Unicum Nyrt's flat earnings over the past five years. It's better than seeing them drop, certainly, but over the long term, all of the best dividend stocks are able to meaningfully grow their earnings per share.

Many investors will assess a company's dividend performance by evaluating how much the dividend payments have changed over time. Zwack Unicum Nyrt's dividend payments per share have declined at 9.9% per year on average over the past 10 years, which is uninspiring.

Final Takeaway

Should investors buy Zwack Unicum Nyrt for the upcoming dividend? Earnings per share have been flat, although at least the company is paying out a low and conservative percentage of both its earnings and cash flow. It's definitely not great to see earnings falling, but at least there may be some buffer before the dividend gets cut. Overall we're not hugely bearish on the stock, but there are likely better dividend investments out there.

Keen to explore more data on Zwack Unicum Nyrt's financial performance? Check out our visualisation of its historical revenue and earnings growth.

If you're in the market for dividend stocks, we recommend checking our list of top dividend stocks with a greater than 2% yield and an upcoming dividend.

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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. 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.
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