Don't Race Out To Buy Caspar Asset Management S.A. (WSE:CSR) Just Because It's Going Ex-Dividend

Caspar Asset Management S.A. (WSE:CSR) is about to trade ex-dividend in the next 2 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 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. Accordingly, Caspar Asset Management investors that purchase the stock on or after the 8th of July will not receive the dividend, which will be paid on the 22nd of July.

The company's next dividend payment will be zł0.21 per share, on the back of last year when the company paid a total of zł0.21 to shareholders. Based on the last year's worth of payments, Caspar Asset Management stock has a trailing yield of around 2.5% on the current share price of zł8.55. If you buy this business for its dividend, you should have an idea of whether Caspar Asset Management's dividend is reliable and sustainable. We need to see whether the dividend is covered by earnings and if it's growing.

Check out our latest analysis for Caspar Asset Management

If a company pays out more in dividends than it earned, then the dividend might become unsustainable - hardly an ideal situation. Caspar Asset Management distributed an unsustainably high 117% of its profit as dividends to shareholders last year. Without more sustainable payment behaviour, the dividend looks precarious.

When the dividend payout ratio is high, as it is in this case, the dividend is usually at greater risk of being cut in the future.

Click here to see how much of its profit Caspar Asset Management 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. This is why it's a relief to see Caspar Asset Management earnings per share are up 7.1% 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. Since the start of our data, five years ago, Caspar Asset Management has lifted its dividend by approximately 9.1% a year on average. It's encouraging to see the company lifting dividends while earnings are growing, suggesting at least some corporate interest in rewarding shareholders.

The Bottom Line

Is Caspar Asset Management an attractive dividend stock, or better left on the shelf? Caspar Asset Management has been growing earnings per share at a reasonable rate, but over the last year its dividend was not well covered by earnings. This is not an overtly appealing combination of characteristics, and we're just not that interested in this company's dividend.

With that in mind though, if the poor dividend characteristics of Caspar Asset Management don't faze you, it's worth being mindful of the risks involved with this business. For example, we've found 3 warning signs for Caspar Asset Management (1 is potentially serious!) that deserve your attention before investing in 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.

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