Be Sure To Check Out SpareBank 1 Østfold Akershus (OB:SOAG) Before It Goes Ex-Dividend

SpareBank 1 Østfold Akershus (OB:SOAG) is about to trade ex-dividend in the next 3 days. The ex-dividend date is one business day 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 because any transaction on a stock needs to have been settled before the record date in order to be eligible for a dividend. In other words, investors can purchase SpareBank 1 Østfold Akershus' shares before the 30th of March in order to be eligible for the dividend, which will be paid on the 6th of April.

The company's upcoming dividend is kr16.20 a share, following on from the last 12 months, when the company distributed a total of kr16.20 per share to shareholders. Calculating the last year's worth of payments shows that SpareBank 1 Østfold Akershus has a trailing yield of 4.1% on the current share price of NOK394. Dividends are an important source of income to many shareholders, but the health of the business is crucial to maintaining those dividends. So we need to investigate whether SpareBank 1 Østfold Akershus can afford its dividend, and if the dividend could grow.

View our latest analysis for SpareBank 1 Østfold Akershus

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. SpareBank 1 Østfold Akershus paid out a comfortable 48% 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 the company's payout ratio, plus analyst estimates of its future dividends.

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. Investors love dividends, so if earnings fall and the dividend is reduced, expect a stock to be sold off heavily at the same time. This is why it's a relief to see SpareBank 1 Østfold Akershus earnings per share are up 4.3% per annum over the last five years.

The main way most investors will assess a company's dividend prospects is by checking the historical rate of dividend growth. In the past 10 years, SpareBank 1 Østfold Akershus has increased its dividend at approximately 8.3% a year on average. We're glad to see dividends rising alongside earnings over a number of years, which may be a sign the company intends to share the growth with shareholders.

The Bottom Line

Is SpareBank 1 Østfold Akershus an attractive dividend stock, or better left on the shelf? 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. We think this is a pretty attractive combination, and would be interested in investigating SpareBank 1 Østfold Akershus more closely.

On that note, you'll want to research what risks SpareBank 1 Østfold Akershus is facing. Our analysis shows 1 warning sign for SpareBank 1 Østfold Akershus and you should be aware of this before buying any shares.

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.