Powszechna Kasa Oszczednosci Bank Polski Spólka Akcyjna (WSE:PKO) Looks Interesting, And It's About To Pay A Dividend

Powszechna Kasa Oszczednosci Bank Polski Spólka Akcyjna (WSE:PKO) stock is about to trade ex-dividend in 4 days. The ex-dividend date is usually set to be one business day before the record date which is the cut-off date on which you must be present on the company's books as a shareholder in order to receive the dividend. The ex-dividend date is of consequence because whenever a stock is bought or sold, the trade takes at least two business day to settle. Thus, you can purchase Powszechna Kasa Oszczednosci Bank Polski Spólka Akcyjna's shares before the 7th of August in order to receive the dividend, which the company will pay on the 22nd of August.

The company's next dividend payment will be zł2.59 per share, and in the last 12 months, the company paid a total of zł2.59 per share. Calculating the last year's worth of payments shows that Powszechna Kasa Oszczednosci Bank Polski Spólka Akcyjna has a trailing yield of 4.5% on the current share price of zł57.96. 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 Powszechna Kasa Oszczednosci Bank Polski Spólka Akcyjna can afford its dividend, and if the dividend could grow.

Check out our latest analysis for Powszechna Kasa Oszczednosci Bank Polski Spólka Akcyjna

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. Powszechna Kasa Oszczednosci Bank Polski Spólka Akcyjna paid out more than half (53%) of its earnings last year, which is a regular payout ratio for most companies. Powszechna Kasa Oszczednosci Bank Polski Spólka Akcyjna paid a dividend despite reporting negative free cash flow last year. That's typically a bad combination and - if this were more than a one-off - not sustainable.

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. 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 Powszechna Kasa Oszczednosci Bank Polski Spólka Akcyjna's earnings per share have risen 10% 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, Powszechna Kasa Oszczednosci Bank Polski Spólka Akcyjna has lifted its dividend by approximately 13% a year on average. Both per-share earnings and dividends have both been growing rapidly in recent times, which is great to see.

To Sum It Up

From a dividend perspective, should investors buy or avoid Powszechna Kasa Oszczednosci Bank Polski Spólka Akcyjna? Earnings per share are growing at an attractive rate, and Powszechna Kasa Oszczednosci Bank Polski Spólka Akcyjna is paying out a bit over half its profits. In summary, Powszechna Kasa Oszczednosci Bank Polski Spólka Akcyjna appears to have some promise as a dividend stock, and we'd suggest taking a closer look at it.

With that in mind, a critical part of thorough stock research is being aware of any risks that stock currently faces. For example, we've found 1 warning sign for Powszechna Kasa Oszczednosci Bank Polski Spólka Akcyjna that we recommend you consider before investing in the business.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com