Stock Analysis

FinecoBank Banca Fineco (BIT:FBK) Could Be A Buy For Its Upcoming Dividend

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Readers hoping to buy FinecoBank Banca Fineco S.p.A. (BIT:FBK) for its dividend will need to make their move shortly, as the stock is about to trade ex-dividend. Typically, the ex-dividend date is one business day before the record date which is the date on which a company determines the shareholders eligible to receive a dividend. The ex-dividend date is of consequence because whenever a stock is bought or sold, the trade takes at least two business day to settle. Thus, you can purchase FinecoBank Banca Fineco's shares before the 22nd of March in order to receive the dividend, which the company will pay on the 24th of March.

The company's next dividend payment will be €0.49 per share, on the back of last year when the company paid a total of €0.49 to shareholders. Based on the last year's worth of payments, FinecoBank Banca Fineco stock has a trailing yield of around 3.7% on the current share price of €13.295. If you buy this business for its dividend, you should have an idea of whether FinecoBank Banca Fineco's dividend is reliable and sustainable. That's why we should always check whether the dividend payments appear sustainable, and if the company is growing.

View our latest analysis for FinecoBank Banca Fineco

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. FinecoBank Banca Fineco paid out more than half (62%) of its earnings last year, which is a regular payout ratio for most companies.

Companies that pay out less in dividends than they earn in profits generally have more sustainable dividends. The lower the payout ratio, the more wiggle room the business has before it could be forced to cut the dividend.

Click here to see the company's payout ratio, plus analyst estimates of its future dividends.

BIT:FBK Historic Dividend March 17th 2023

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. If earnings fall far enough, the company could be forced to cut its dividend. For this reason, we're glad to see FinecoBank Banca Fineco's earnings per share have risen 15% per annum over the last five years.

The main way most investors will assess a company's dividend prospects is by checking the historical rate of dividend growth. FinecoBank Banca Fineco has delivered an average of 12% per year annual increase in its dividend, based on the past eight years of dividend payments. Both per-share earnings and dividends have both been growing rapidly in recent times, which is great to see.

The Bottom Line

Has FinecoBank Banca Fineco got what it takes to maintain its dividend payments? Earnings per share are growing nicely, and FinecoBank Banca Fineco is paying out a percentage of its earnings that is around the average for dividend-paying stocks. FinecoBank Banca Fineco ticks a lot of boxes for us from a dividend perspective, and we think these characteristics should mark the company as deserving of further attention.

In light of that, while FinecoBank Banca Fineco has an appealing dividend, it's worth knowing the risks involved with this stock. Case in point: We've spotted 1 warning sign for FinecoBank Banca Fineco you should be aware of.

If you're in the market for strong dividend payers, we recommend checking our selection of top dividend stocks.

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Find out whether FinecoBank Banca Fineco is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.

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