Is It Smart To Buy Mediobanca Banca di Credito Finanziario S.p.A. (BIT:MB) Before It Goes Ex-Dividend?

Mediobanca Banca di Credito Finanziario S.p.A. (BIT:MB) is about to trade ex-dividend in the next 2 days. The ex-dividend date occurs one day before the record date which is the day on which shareholders need to be on the company's books in order to receive a dividend. The ex-dividend date is important because any transaction on a stock needs to have been settled before the record date in order to be eligible for a dividend. Therefore, if you purchase Mediobanca Banca di Credito Finanziario's shares on or after the 18th of November, you won't be eligible to receive the dividend, when it is paid on the 20th of November.

The company's next dividend payment will be €0.56 per share, on the back of last year when the company paid a total of €1.12 to shareholders. Based on the last year's worth of payments, Mediobanca Banca di Credito Finanziario has a trailing yield of 7.8% on the current stock price of €14.44. 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 Mediobanca Banca di Credito Finanziario

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. Mediobanca Banca di Credito Finanziario paid out more than half (69%) of its earnings last year, which is a regular payout ratio for most companies.

When a company paid out less in dividends than it earned in profit, this generally suggests its dividend is affordable. The lower the % of its profit that it pays out, the greater the margin of safety for the dividend if the business enters a downturn.

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

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 business enters a downturn and the dividend is cut, the company could see its value fall precipitously. With that in mind, we're encouraged by the steady growth at Mediobanca Banca di Credito Finanziario, with earnings per share up 9.9% on average over the last five years.

Another key way to measure a company's dividend prospects is by measuring its historical rate of dividend growth. In the past 10 years, Mediobanca Banca di Credito Finanziario has increased its dividend at approximately 22% 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.

Final Takeaway

Has Mediobanca Banca di Credito Finanziario got what it takes to maintain its dividend payments? Mediobanca Banca di Credito Finanziario has been generating some growth in earnings per share while paying out more than half of its earnings to shareholders in the form of dividends. We're unconvinced on the company's merits, and think there might be better opportunities out there.

If you're not too concerned about Mediobanca Banca di Credito Finanziario's ability to pay dividends, you should still be mindful of some of the other risks that this business faces. Every company has risks, and we've spotted 1 warning sign for Mediobanca Banca di Credito Finanziario you should know about.

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.