Saccheria F.lli Franceschetti S.p.A. (BIT:SAC) Passed Our Checks, And It's About To Pay A €0.042 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 Saccheria F.lli Franceschetti S.p.A. (BIT:SAC) is about to go ex-dividend in just three days. Typically, the ex-dividend date is one business day before the record date which is the date on which a company determines the shareholders eligible to receive a dividend. The ex-dividend date is an important date to be aware of as any purchase of the stock made on or after this date might mean a late settlement that doesn't show on the record date. Therefore, if you purchase Saccheria F.lli Franceschetti's shares on or after the 13th of May, you won't be eligible to receive the dividend, when it is paid on the 15th of May.

The company's next dividend payment will be €0.042 per share, on the back of last year when the company paid a total of €0.041 to shareholders. Calculating the last year's worth of payments shows that Saccheria F.lli Franceschetti has a trailing yield of 3.6% on the current share price of €1.15. Dividends are a major contributor to investment returns for long term holders, but only if the dividend continues to be paid. We need to see whether the dividend is covered by earnings and if it's growing.

See our latest analysis for Saccheria F.lli Franceschetti

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. Fortunately Saccheria F.lli Franceschetti's payout ratio is modest, at just 28% of profit.

Click here to see how much of its profit Saccheria F.lli Franceschetti paid out over the last 12 months.

Have Earnings And Dividends Been Growing?

Companies with consistently growing earnings per share generally make the best dividend stocks, as they usually find it easier to grow dividends per share. If earnings decline and the company is forced to cut its dividend, investors could watch the value of their investment go up in smoke. For that reason, it's encouraging to see Saccheria F.lli Franceschetti's earnings over the past year have risen 40%. While we'd be remiss not to point out that a year is a very short time in dividend investing, it's an encouraging sign so far.

We do note though, one year is too short a time to be drawing strong conclusions about a company's future growth prospects.

Saccheria F.lli Franceschetti also issued more than 5% of its market cap in new stock during the past year, which we feel is likely to hurt its dividend prospects in the long run. It's hard to grow dividends per share when a company keeps creating new shares.

Unfortunately Saccheria F.lli Franceschetti has only been paying a dividend for a year or so, so there's not much of a history to draw insight from.

Final Takeaway

From a dividend perspective, should investors buy or avoid Saccheria F.lli Franceschetti? Saccheria F.lli Franceschetti has been growing earnings at a rapid rate, and has a conservatively low payout ratio, implying that it is reinvesting heavily in its business; a sterling combination. There's a lot to like about Saccheria F.lli Franceschetti, and we would prioritise taking a closer look at it.

On that note, you'll want to research what risks Saccheria F.lli Franceschetti is facing. Every company has risks, and we've spotted 5 warning signs for Saccheria F.lli Franceschetti (of which 1 doesn't sit too well with us!) you should know about.

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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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.