Italian Exhibition Group (BIT:IEG) Could Be A Buy For Its Upcoming Dividend

Readers hoping to buy Italian Exhibition Group S.p.A. (BIT:IEG) for its dividend will need to make their move shortly, as the stock is about to trade ex-dividend. The ex-dividend date is commonly two business days before the record date, which is the cut-off date for shareholders to be present on the company's books to be eligible for a dividend payment. The ex-dividend date is important as the process of settlement involves at least two full business days. So if you miss that date, you would not show up on the company's books on the record date. Thus, you can purchase Italian Exhibition Group's shares before the 12th of May in order to receive the dividend, which the company will pay on the 14th of May.

The company's next dividend payment will be €0.20 per share, and in the last 12 months, the company paid a total of €0.20 per share. Based on the last year's worth of payments, Italian Exhibition Group has a trailing yield of 2.6% on the current stock price of €7.74. 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! So we need to investigate whether Italian Exhibition Group can afford its dividend, and if the dividend could grow.

Trump has pledged to "unleash" American oil and gas and these 15 US stocks have developments that are poised to benefit.

If a company pays out more in dividends than it earned, then the dividend might become unsustainable - hardly an ideal situation. Italian Exhibition Group has a low and conservative payout ratio of just 19% of its income after tax. A useful secondary check can be to evaluate whether Italian Exhibition Group generated enough free cash flow to afford its dividend. What's good is that dividends were well covered by free cash flow, with the company paying out 15% of its cash flow last year.

It's positive to see that Italian Exhibition Group's dividend is covered by both profits and cash flow, since this is generally a sign that the dividend is sustainable, and a lower payout ratio usually suggests a greater margin of safety before the dividend gets cut.

View our latest analysis for Italian Exhibition Group

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

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 Italian Exhibition Group's earnings have been skyrocketing, up 20% per annum for the past five years. With earnings per share growing rapidly and the company sensibly reinvesting almost all of its profits within the business, Italian Exhibition Group looks like a promising growth company.

Unfortunately Italian Exhibition Group 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

Is Italian Exhibition Group worth buying for its dividend? We love that Italian Exhibition Group is growing earnings per share while simultaneously paying out a low percentage of both its earnings and cash flow. These characteristics suggest the company is reinvesting in growing its business, while the conservative payout ratio also implies a reduced risk of the dividend being cut in the future. There's a lot to like about Italian Exhibition Group, and we would prioritise taking a closer look at it.

Curious what other investors think of Italian Exhibition Group? See what analysts are forecasting, with this visualisation of its historical and future estimated earnings and cash flow.

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

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.