Here's What We Like About Banca Generali's (BIT:BGN) Upcoming Dividend

Some investors rely on dividends for growing their wealth, and if you're one of those dividend sleuths, you might be intrigued to know that Banca Generali S.p.A. (BIT:BGN) is about to go ex-dividend in just four days. The ex-dividend date is one business day before a company's record date, which is the date on which the company determines which shareholders are entitled to receive a 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. Therefore, if you purchase Banca Generali's shares on or after the 19th of February, you won't be eligible to receive the dividend, when it is paid on the 21st of February.

The company's next dividend payment will be €0.65 per share. Last year, in total, the company distributed €2.15 to shareholders. Last year's total dividend payments show that Banca Generali has a trailing yield of 6.4% on the current share price of €33.59. If you buy this business for its dividend, you should have an idea of whether Banca Generali's dividend is reliable and sustainable. As a result, readers should always check whether Banca Generali has been able to grow its dividends, or if the dividend might be cut.

See our latest analysis for Banca Generali

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. Banca Generali is paying out an acceptable 60% of its profit, a common payout level among most companies.

Generally speaking, the lower a company's payout ratios, the more resilient its dividend usually is.

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

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. Investors love dividends, so if earnings fall and the dividend is reduced, expect a stock to be sold off heavily at the same time. Fortunately for readers, Banca Generali's earnings per share have been growing at 13% a year for the past five years.

The main way most investors will assess a company's dividend prospects is by checking the historical rate of dividend growth. Banca Generali has delivered an average of 9.1% per year annual increase in its dividend, based on the past 10 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.

The Bottom Line

Is Banca Generali worth buying for its dividend? Earnings per share are growing nicely, and Banca Generali is paying out a percentage of its earnings that is around the average for dividend-paying stocks. Overall, Banca Generali looks like a promising dividend stock in this analysis, and we think it would be worth investigating further.

On that note, you'll want to research what risks Banca Generali is facing. To help with this, we've discovered 1 warning sign for Banca Generali that you should be aware of before investing in their 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.