Here's What We Like About Alfio Bardolla Training Group's (BIT:ABTG) Upcoming Dividend

By
Simply Wall St
Published
May 12, 2022
BIT:ABTG
Source: Shutterstock

Alfio Bardolla Training Group S.p.A. (BIT:ABTG) stock is about to trade ex-dividend in 3 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 as the process of settlement involves two full business days. So if you miss that date, you would not show up on the company's books on the record date. In other words, investors can purchase Alfio Bardolla Training Group's shares before the 16th of May in order to be eligible for the dividend, which will be paid on the 18th of May.

The company's upcoming dividend is €0.032 a share, following on from the last 12 months, when the company distributed a total of €0.032 per share to shareholders. Last year's total dividend payments show that Alfio Bardolla Training Group has a trailing yield of 1.1% on the current share price of €2.93. Dividends are a major contributor to investment returns for long term holders, but only if the dividend continues to be paid. That's why we should always check whether the dividend payments appear sustainable, and if the company is growing.

Check out our latest analysis for Alfio Bardolla Training Group

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. Alfio Bardolla Training Group paid out a comfortable 28% of its profit last year. 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.

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

historic-dividend
BIT:ABTG Historic Dividend May 12th 2022

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. That's why it's comforting to see Alfio Bardolla Training Group's earnings have been skyrocketing, up 47% per annum for the past five years.

Many investors will assess a company's dividend performance by evaluating how much the dividend payments have changed over time. Alfio Bardolla Training Group's dividend payments per share have declined at 8.7% per year on average over the past four years, which is uninspiring. Alfio Bardolla Training Group is a rare case where dividends have been decreasing at the same time as earnings per share have been improving. It's unusual to see, and could point to unstable conditions in the core business, or more rarely an intensified focus on reinvesting profits.

The Bottom Line

From a dividend perspective, should investors buy or avoid Alfio Bardolla Training Group? We're glad to see the company has been improving its earnings per share while also paying out a low percentage of income. However, it's not great to see it paying out what we see as an uncomfortably high percentage of its cash flow. In summary, it's hard to get excited about Alfio Bardolla Training Group from a dividend perspective.

In light of that, while Alfio Bardolla Training Group has an appealing dividend, it's worth knowing the risks involved with this stock. To that end, you should learn about the 3 warning signs we've spotted with Alfio Bardolla Training Group (including 1 which shouldn't be ignored).

Generally, we wouldn't recommend just buying the first dividend stock you see. Here's a curated list of interesting stocks that are strong dividend payers.

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