Azienda Bresciana Petroli Nocivelli (BIT:ABP) Could Be A Buy For Its Upcoming Dividend

Azienda Bresciana Petroli Nocivelli S.p.A. (BIT:ABP) stock is about to trade ex-dividend in 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. Accordingly, Azienda Bresciana Petroli Nocivelli investors that purchase the stock on or after the 18th of November will not receive the dividend, which will be paid on the 20th of November.

The company's next dividend payment will be €0.06 per share. Last year, in total, the company distributed €0.049 to shareholders. Calculating the last year's worth of payments shows that Azienda Bresciana Petroli Nocivelli has a trailing yield of 1.1% on the current share price of €5.45. 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 Azienda Bresciana Petroli Nocivelli has been able to grow its dividends, or if the dividend might be cut.

View our latest analysis for Azienda Bresciana Petroli Nocivelli

Dividends are usually paid out of company profits, so if a company pays out more than it earned then its dividend is usually at greater risk of being cut. Azienda Bresciana Petroli Nocivelli paid out just 13% of its profit last year, which we think is conservatively low and leaves plenty of margin for unexpected circumstances.

Click here to see how much of its profit Azienda Bresciana Petroli Nocivelli paid out over the last 12 months.

Have Earnings And Dividends Been Growing?

Stocks in companies that generate sustainable earnings growth often make the best dividend prospects, as it is easier to lift the dividend when earnings are rising. If earnings decline and the company is forced to cut its dividend, investors could watch the value of their investment go up in smoke. This is why it's a relief to see Azienda Bresciana Petroli Nocivelli earnings per share are up 9.4% 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. Azienda Bresciana Petroli Nocivelli has delivered an average of 11% per year annual increase in its dividend, based on the past two years of dividend payments. It's encouraging to see the company lifting dividends while earnings are growing, suggesting at least some corporate interest in rewarding shareholders.

To Sum It Up

Should investors buy Azienda Bresciana Petroli Nocivelli for the upcoming dividend? Earnings per share growth has been growing somewhat, and Azienda Bresciana Petroli Nocivelli is paying out less than half its earnings and cash flow as dividends. This is interesting for a few reasons, as it suggests management may be reinvesting heavily in the business, but it also provides room to increase the dividend in time. It might be nice to see earnings growing faster, but Azienda Bresciana Petroli Nocivelli is being conservative with its dividend payouts and could still perform reasonably over the long run. All things considered, we are not particularly enthused about Azienda Bresciana Petroli Nocivelli from a dividend perspective.

On that note, you'll want to research what risks Azienda Bresciana Petroli Nocivelli is facing. For example, we've found 2 warning signs for Azienda Bresciana Petroli Nocivelli (1 doesn't sit too well with us!) that deserve your attention before investing in the shares.

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