There's A Lot To Like About Sparebanken Vest's (OB:SVEG) Upcoming kr08.50 Dividend

Sparebanken Vest (OB:SVEG) is about to trade ex-dividend in the next 2 days. The ex-dividend date generally occurs two days before the record date, which is the day on which shareholders need to be on the company's books in order to receive a dividend. The ex-dividend date is an important date to be aware of as any purchase of the stock made on or after this date might mean a late settlement that doesn't show on the record date. In other words, investors can purchase Sparebanken Vest's shares before the 28th of March in order to be eligible for the dividend, which will be paid on the 7th of April.

The company's next dividend payment will be kr08.50 per share, and in the last 12 months, the company paid a total of kr8.50 per share. Based on the last year's worth of payments, Sparebanken Vest has a trailing yield of 5.9% on the current stock price of kr0145.14. Dividends are a major contributor to investment returns for long term holders, but only if the dividend continues to be paid. That's why we should always check whether the dividend payments appear sustainable, and if the company is growing.

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. Sparebanken Vest is paying out an acceptable 51% of its profit, a common payout level among most companies.

When a company paid out less in dividends than it earned in profit, this generally suggests its dividend is affordable. The lower the % of its profit that it pays out, the greater the margin of safety for the dividend if the business enters a downturn.

View our latest analysis for Sparebanken Vest

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 earnings decline and the company is forced to cut its dividend, investors could watch the value of their investment go up in smoke. For this reason, we're glad to see Sparebanken Vest's earnings per share have risen 17% 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, Sparebanken Vest has increased its dividend at approximately 11% a year on average. Both per-share earnings and dividends have both been growing rapidly in recent times, which is great to see.

The Bottom Line

Should investors buy Sparebanken Vest for the upcoming dividend? Sparebanken Vest has an acceptable payout ratio and its earnings per share have been improving at a decent rate. Overall, Sparebanken Vest looks like a promising dividend stock in this analysis, and we think it would be worth investigating further.

So while Sparebanken Vest looks good from a dividend perspective, it's always worthwhile being up to date with the risks involved in this stock. For example - Sparebanken Vest has 1 warning sign we think you should be aware of.

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.