Reti S.p.A. (BIT:RETI) Passed Our Checks, And It's About To Pay A €0.058 Dividend

Regular readers will know that we love our dividends at Simply Wall St, which is why it's exciting to see Reti S.p.A. (BIT:RETI) is about to trade ex-dividend in the next 3 days. The ex-dividend date is usually set to be one business day 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. The ex-dividend date is of consequence because whenever a stock is bought or sold, the trade takes at least two business day to settle. This means that investors who purchase Reti's shares on or after the 15th of April will not receive the dividend, which will be paid on the 17th of April.

The company's next dividend payment will be €0.058 per share, and in the last 12 months, the company paid a total of €0.058 per share. Based on the last year's worth of payments, Reti stock has a trailing yield of around 2.8% on the current share price of €2.08. Dividends are an important source of income to many shareholders, but the health of the business is crucial to maintaining those dividends. We need to see whether the dividend is covered by earnings and if it's growing.

Check out our latest analysis for Reti

If a company pays out more in dividends than it earned, then the dividend might become unsustainable - hardly an ideal situation. Reti paid out more than half (56%) of its earnings last year, which is a regular payout ratio for most companies.

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

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 we're glad to see earnings per share up 18% over the past 12 months.

One year is not very long in the grand scheme of things though, so we wouldn't draw too strong a conclusion based on these results.

Many investors will assess a company's dividend performance by evaluating how much the dividend payments have changed over time. Reti has delivered an average of 13% per year annual increase in its dividend, based on the past three years of dividend payments. It's great to see earnings per share growing rapidly over several years, and dividends per share growing right along with it.

The Bottom Line

Is Reti an attractive dividend stock, or better left on the shelf? Earnings per share are growing nicely, and Reti is paying out a percentage of its earnings that is around the average for dividend-paying stocks. In summary, Reti appears to have some promise as a dividend stock, and we'd suggest taking a closer look at it.

In light of that, while Reti has an appealing dividend, it's worth knowing the risks involved with this stock. Case in point: We've spotted 3 warning signs for Reti 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.