We Wouldn't Be Too Quick To Buy Allcore S.p.A. (BIT:CORE) Before It Goes Ex-Dividend

Allcore S.p.A. (BIT:CORE) stock is about to trade ex-dividend in three days. The ex-dividend date is usually set to be two business days 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. It is important to be aware of the ex-dividend date because any trade on the stock needs to have been settled on or before the record date. This means that investors who purchase Allcore's shares on or after the 26th of May will not receive the dividend, which will be paid on the 28th of May.

The company's next dividend payment will be €0.08 per share, and in the last 12 months, the company paid a total of €0.06 per share. Looking at the last 12 months of distributions, Allcore has a trailing yield of approximately 3.5% on its current stock price of €1.72. Dividends are an important source of income to many shareholders, but the health of the business is crucial to maintaining those dividends. That's why we should always check whether the dividend payments appear sustainable, and if the company is growing.

Our free stock report includes 3 warning signs investors should be aware of before investing in Allcore. Read for free now.

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. Its dividend payout ratio is 88% of profit, which means the company is paying out a majority of its earnings. The relatively limited profit reinvestment could slow the rate of future earnings growth. It could become a concern if earnings started to decline. Yet cash flows are even more important than profits for assessing a dividend, so we need to see if the company generated enough cash to pay its distribution.

Check out our latest analysis for Allcore

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

Have Earnings And Dividends Been Growing?

When earnings decline, dividend companies become much harder to analyse and own safely. If business enters a downturn and the dividend is cut, the company could see its value fall precipitously. So we're not too excited that Allcore's earnings are down 4.8% a year over the past five years.

Many investors will assess a company's dividend performance by evaluating how much the dividend payments have changed over time. Allcore has seen its dividend decline 23% per annum on average over the past two years, which is not great to see. It's never nice to see earnings and dividends falling, but at least management has cut the dividend rather than potentially risk the company's health in an attempt to maintain it.

Final Takeaway

Has Allcore got what it takes to maintain its dividend payments? Allcore had an average payout ratio, but its free cash flow was lower and earnings per share have been declining. It's not that we think Allcore is a bad company, but these characteristics don't generally lead to outstanding dividend performance.

So if you're still interested in Allcore despite it's poor dividend qualities, you should be well informed on some of the risks facing this stock. Be aware that Allcore is showing 3 warning signs in our investment analysis, and 1 of those can't be ignored...

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.