Is It Worth Considering ABG Sundal Collier Holding ASA (OB:ABG) For Its Upcoming Dividend?

Regular readers will know that we love our dividends at Simply Wall St, which is why it's exciting to see ABG Sundal Collier Holding ASA (OB:ABG) is about to trade ex-dividend in the next 2 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. Meaning, you will need to purchase ABG Sundal Collier Holding's shares before the 19th of April to receive the dividend, which will be paid on the 29th of April.

The company's next dividend payment will be kr00.50 per share, on the back of last year when the company paid a total of kr0.50 to shareholders. Calculating the last year's worth of payments shows that ABG Sundal Collier Holding has a trailing yield of 8.0% on the current share price of kr06.22. Dividends are a major contributor to investment returns for long term holders, but only if the dividend continues to be paid. So we need to investigate whether ABG Sundal Collier Holding can afford its dividend, and if the dividend could grow.

See our latest analysis for ABG Sundal Collier Holding

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. ABG Sundal Collier Holding paid out 103% of its earnings, which is more than we're comfortable with, unless there are mitigating circumstances.

When a company pays out a dividend that is not well covered by profits, the dividend is generally seen as more vulnerable to being cut.

Click here to see how much of its profit ABG Sundal Collier Holding 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. Investors love dividends, so if earnings fall and the dividend is reduced, expect a stock to be sold off heavily at the same time. With that in mind, we're encouraged by the steady growth at ABG Sundal Collier Holding, with earnings per share up 8.3% on average over the last five years.

Many investors will assess a company's dividend performance by evaluating how much the dividend payments have changed over time. It looks like the ABG Sundal Collier Holding dividends are largely the same as they were 10 years ago.

To Sum It Up

Is ABG Sundal Collier Holding worth buying for its dividend? While we like that its earnings are growing somewhat, we're not enamored that it's paying out 103% of last year's earnings. This is not an overtly appealing combination of characteristics, and we're just not that interested in this company's dividend.

With that being said, if you're still considering ABG Sundal Collier Holding as an investment, you'll find it beneficial to know what risks this stock is facing. To help with this, we've discovered 4 warning signs for ABG Sundal Collier Holding (2 are concerning!) that you ought to be aware of before buying the shares.

A common investing mistake is buying the first interesting stock you see. Here you can find a full list of high-yield 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.