FinecoBank Banca Fineco S.p.A. (BIT:FBK) Looks Interesting, And It's About To Pay A Dividend

It looks like FinecoBank Banca Fineco S.p.A. (BIT:FBK) is about to go ex-dividend in the next 3 days. The ex-dividend date is usually set to be one business day 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 takes at least two business day to settle. This means that investors who purchase FinecoBank Banca Fineco's shares on or after the 22nd of May will not receive the dividend, which will be paid on the 24th of May.

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. Last year's total dividend payments show that FinecoBank Banca Fineco has a trailing yield of 3.9% on the current share price of €12.55. Dividends are a major contributor to investment returns for long term holders, but only if the dividend continues to be paid. So we need to investigate whether FinecoBank Banca Fineco can afford its dividend, and if the dividend could grow.

Check out our latest analysis for FinecoBank Banca Fineco

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. FinecoBank Banca Fineco paid out more than half (66%) 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.

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 decline and the company is forced to cut its dividend, investors could watch the value of their investment go up in smoke. For this reason, we're glad to see FinecoBank Banca Fineco's earnings per share have risen 16% per annum 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. FinecoBank Banca Fineco has delivered 12% dividend growth per year on average over the past eight years. It's exciting to see that both earnings and dividends per share have grown rapidly over the past few years.

The Bottom Line

Has FinecoBank Banca Fineco got what it takes to maintain its dividend payments? Earnings per share are growing at an attractive rate, and FinecoBank Banca Fineco is paying out a bit over half its profits. Overall, FinecoBank Banca Fineco looks like a promising dividend stock in this analysis, and we think it would be worth investigating further.

So while FinecoBank Banca Fineco looks good from a dividend perspective, it's always worthwhile being up to date with the risks involved in this stock. For example - FinecoBank Banca Fineco has 2 warning signs we think you should be aware of.

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.