Dr. Miele Cosmed Group S.A. (WSE:DMG) Passed Our Checks, And It's About To Pay A zł0.09 Dividend

Some investors rely on dividends for growing their wealth, and if you're one of those dividend sleuths, you might be intrigued to know that Dr. Miele Cosmed Group S.A. (WSE:DMG) is about to go ex-dividend in just four days. The ex-dividend date occurs one day 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. Therefore, if you purchase Dr. Miele Cosmed Group's shares on or after the 2nd of July, you won't be eligible to receive the dividend, when it is paid on the 19th of September.

The company's next dividend payment will be zł0.09 per share, and in the last 12 months, the company paid a total of zł0.09 per share. Based on the last year's worth of payments, Dr. Miele Cosmed Group stock has a trailing yield of around 2.6% on the current share price of zł3.44. 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 Dr. Miele Cosmed Group can afford its dividend, and if the dividend could grow.

View our latest analysis for Dr. Miele Cosmed Group

If a company pays out more in dividends than it earned, then the dividend might become unsustainable - hardly an ideal situation. Dr. Miele Cosmed Group paid out a comfortable 29% of its profit last year.

Click here to see how much of its profit Dr. Miele Cosmed Group paid out over the last 12 months.

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. Fortunately for readers, Dr. Miele Cosmed Group's earnings per share have been growing at 16% a year for the past five years. The company has managed to grow earnings at a rapid rate, while reinvesting most of the profits within the business. Fast-growing businesses that are reinvesting heavily are enticing from a dividend perspective, especially since they can often increase the payout ratio later.

Many investors will assess a company's dividend performance by evaluating how much the dividend payments have changed over time. Dr. Miele Cosmed Group's dividend payments per share have declined at 21% per year on average over the past 10 years, which is uninspiring. Dr. Miele Cosmed Group is a rare case where dividends have been decreasing at the same time as earnings per share have been improving. It's unusual to see, and could point to unstable conditions in the core business, or more rarely an intensified focus on reinvesting profits.

Final Takeaway

Should investors buy Dr. Miele Cosmed Group for the upcoming dividend? Companies like Dr. Miele Cosmed Group that are growing rapidly and paying out a low fraction of earnings, are usually reinvesting heavily in their business. This strategy can add significant value to shareholders over the long term - as long as it's done without issuing too many new shares. In summary, Dr. Miele Cosmed Group appears to have some promise as a dividend stock, and we'd suggest taking a closer look at it.

In light of that, while Dr. Miele Cosmed Group has an appealing dividend, it's worth knowing the risks involved with this stock. Every company has risks, and we've spotted 2 warning signs for Dr. Miele Cosmed Group 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.

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