Is It Smart To Buy Public Property Invest ASA (OB:PUBLI) Before It Goes Ex-Dividend?

Public Property Invest ASA (OB:PUBLI) stock is about to trade ex-dividend in three 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. Meaning, you will need to purchase Public Property Invest's shares before the 1st of October to receive the dividend, which will be paid on the 9th of October.

The company's next dividend payment will be kr00.10 per share. Last year, in total, the company distributed kr0.50 to shareholders. Based on the last year's worth of payments, Public Property Invest has a trailing yield of 2.1% on the current stock price of kr023.35. 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.

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If a company pays out more in dividends than it earned, then the dividend might become unsustainable - hardly an ideal situation. Public Property Invest has a low and conservative payout ratio of just 21% of its income after tax.

View our latest analysis for Public Property Invest

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. If earnings fall far enough, the company could be forced to cut its dividend. That's why it's comforting to see Public Property Invest's earnings have been skyrocketing, up 32% per annum for the past five years. With earnings per share growing rapidly and the company sensibly reinvesting almost all of its profits within the business, Public Property Invest looks like a promising growth company.

We'd also point out that Public Property Invest issued a meaningful number of new shares in the past year. Trying to grow the dividend while issuing large amounts of new shares reminds us of the ancient Greek tale of Sisyphus - perpetually pushing a boulder uphill.

Unfortunately Public Property Invest has only been paying a dividend for a year or so, so there's not much of a history to draw insight from.

The Bottom Line

Has Public Property Invest got what it takes to maintain its dividend payments? Companies like Public Property Invest that are growing rapidly and paying out a low fraction of earnings, are usually reinvesting heavily in their business. Perhaps even more importantly - this can sometimes signal management is focused on the long term future of the business. Overall, Public Property Invest looks like a promising dividend stock in this analysis, and we think it would be worth investigating further.

While it's tempting to invest in Public Property Invest for the dividends alone, you should always be mindful of the risks involved. For example, we've found 4 warning signs for Public Property Invest (3 are concerning!) that deserve your attention before investing in the shares.

If you're in the market for strong dividend payers, we recommend checking our selection of top 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.