Aurskog Sparebank (OB:AURG) Passed Our Checks, And It's About To Pay A kr6.00 Dividend

It looks like Aurskog Sparebank (OB:AURG) is about to go ex-dividend in the next 3 days. This means that investors who purchase shares on or after the 4th of March will not receive the dividend, which will be paid on the 15th of March.

Aurskog Sparebank's next dividend payment will be kr6.00 per share, on the back of last year when the company paid a total of kr6.00 to shareholders. Calculating the last year's worth of payments shows that Aurskog Sparebank has a trailing yield of 2.9% on the current share price of NOK210. If you buy this business for its dividend, you should have an idea of whether Aurskog Sparebank's dividend is reliable and sustainable. We need to see whether the dividend is covered by earnings and if it's growing.

Check out our latest analysis for Aurskog Sparebank

If a company pays out more in dividends than it earned, then the dividend might become unsustainable - hardly an ideal situation. Aurskog Sparebank paid out a comfortable 47% of its profit last year.

Companies that pay out less in dividends than they earn in profits generally have more sustainable dividends. The lower the payout ratio, the more wiggle room the business has before it could be forced to cut the dividend.

Click here to see how much of its profit Aurskog Sparebank 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 business enters a downturn and the dividend is cut, the company could see its value fall precipitously. This is why it's a relief to see Aurskog Sparebank earnings per share are up 3.5% per annum over the last five years.

Aurskog Sparebank 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.

The main way most investors will assess a company's dividend prospects is by checking the historical rate of dividend growth. It looks like the Aurskog Sparebank dividends are largely the same as they were 10 years ago.

The Bottom Line

Is Aurskog Sparebank worth buying for its dividend? It has been growing its earnings per share somewhat in recent years, although it reinvests more than half its earnings in the business, which could suggest there are some growth projects that have not yet reached fruition. Aurskog Sparebank ticks a lot of boxes for us from a dividend perspective, and we think these characteristics should mark the company as deserving of further attention.

So while Aurskog Sparebank looks good from a dividend perspective, it's always worthwhile being up to date with the risks involved in this stock. For example, we've found 3 warning signs for Aurskog Sparebank that we recommend you consider before investing in the business.

If you're in the market for dividend stocks, we recommend checking our list of top dividend stocks with a greater than 2% yield and an upcoming dividend.

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This article by Simply Wall St is general in nature. 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.
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