Next Re SIIQ (BIT:NR) Could Be A Buy For Its Upcoming Dividend

It looks like Next Re SIIQ S.p.A. (BIT:NR) is about to go ex-dividend in the next 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. Meaning, you will need to purchase Next Re SIIQ's shares before the 5th of May to receive the dividend, which will be paid on the 7th of May.

The upcoming dividend for Next Re SIIQ is €0.06 per share. Dividends are a major contributor to investment returns for long term holders, but only if the dividend continues to be paid. So we need to investigate whether Next Re SIIQ can afford its dividend, and if the dividend could grow.

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Dividends are typically paid from company earnings. If a company pays more in dividends than it earned in profit, then the dividend could be unsustainable. Its dividend payout ratio is 82% 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.

Check out our latest analysis for Next Re SIIQ

Click here to see how much of its profit Next Re SIIQ paid out over the last 12 months.

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. If earnings fall far enough, the company could be forced to cut its dividend. Fortunately for readers, Next Re SIIQ's earnings per share have been growing at 16% a year for the past five years. The company paid out most of its earnings as dividends over the last year, even though business is booming and earnings per share are growing rapidly. Higher earnings generally bode well for growing dividends, although with seemingly strong growth prospects we'd wonder why management are not reinvesting more in the business.

This is Next Re SIIQ's first year of paying a regular dividend, so it doesn't have much of a history yet to compare to.

Final Takeaway

Is Next Re SIIQ an attractive dividend stock, or better left on the shelf? Earnings per share are growing nicely, and Next Re SIIQ is paying out a percentage of its earnings that is around the average for dividend-paying stocks. We think this is a pretty attractive combination, and would be interested in investigating Next Re SIIQ more closely.

So while Next Re SIIQ looks good from a dividend perspective, it's always worthwhile being up to date with the risks involved in this stock. For example - Next Re SIIQ has 2 warning signs we think you should be aware of.

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.