Voss Veksel- og Landmandsbank (OB:VVL) Could Be A Buy For Its Upcoming Dividend

Voss Veksel- og Landmandsbank ASA (OB:VVL) stock is about to trade ex-dividend in 4 days. The ex-dividend date is one business day before a company's record date, which is the date on which the company determines which shareholders are entitled to receive a dividend. 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 Voss Veksel- og Landmandsbank's shares before the 26th of April in order to be eligible for the dividend, which will be paid on the 6th of May.

The company's next dividend payment will be kr014.10 per share, and in the last 12 months, the company paid a total of kr14.10 per share. Looking at the last 12 months of distributions, Voss Veksel- og Landmandsbank has a trailing yield of approximately 5.2% on its current stock price of kr0270.00. Dividends are an important source of income to many shareholders, but the health of the business is crucial to maintaining those dividends. That's why we should always check whether the dividend payments appear sustainable, and if the company is growing.

Check out our latest analysis for Voss Veksel- og Landmandsbank

Dividends are typically paid out of company income, so if a company pays out more than it earned, its dividend is usually at a higher risk of being cut. Voss Veksel- og Landmandsbank paid out a comfortable 43% of its profit last year.

Generally speaking, the lower a company's payout ratios, the more resilient its dividend usually is.

Click here to see how much of its profit Voss Veksel- og Landmandsbank 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 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 Voss Veksel- og Landmandsbank's earnings per share have risen 12% per annum over the last five years.

Another key way to measure a company's dividend prospects is by measuring its historical rate of dividend growth. In the last 10 years, Voss Veksel- og Landmandsbank has lifted its dividend by approximately 18% a year on average. It's exciting to see that both earnings and dividends per share have grown rapidly over the past few years.

The Bottom Line

From a dividend perspective, should investors buy or avoid Voss Veksel- og Landmandsbank? When companies are growing rapidly and retaining a majority of the profits within the business, it's usually a sign that reinvesting earnings creates more value than paying dividends to shareholders. This is one of the most attractive investment combinations under this analysis, as it can create substantial value for investors over the long run. We think this is a pretty attractive combination, and would be interested in investigating Voss Veksel- og Landmandsbank more closely.

On that note, you'll want to research what risks Voss Veksel- og Landmandsbank is facing. Every company has risks, and we've spotted 2 warning signs for Voss Veksel- og Landmandsbank you should know about.

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.