Just Three Days Till Powszechny Zaklad Ubezpieczen SA (WSE:PZU) Will Be Trading Ex-Dividend

Readers hoping to buy Powszechny Zaklad Ubezpieczen SA (WSE:PZU) for its dividend will need to make their move shortly, as the stock is about to trade ex-dividend. 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, Powszechny Zaklad Ubezpieczen investors that purchase the stock on or after the 6th of September will not receive the dividend, which will be paid on the 28th of September.

The company's next dividend payment will be zł2.40 per share, on the back of last year when the company paid a total of zł2.40 to shareholders. Based on the last year's worth of payments, Powszechny Zaklad Ubezpieczen stock has a trailing yield of around 5.7% on the current share price of PLN42.24. Dividends are a major contributor to investment returns for long term holders, but only if the dividend continues to be paid. We need to see whether the dividend is covered by earnings and if it's growing.

See our latest analysis for Powszechny Zaklad Ubezpieczen

If a company pays out more in dividends than it earned, then the dividend might become unsustainable - hardly an ideal situation. Powszechny Zaklad Ubezpieczen paid out 57% of its earnings to investors last year, a normal payout level for most businesses.

Generally speaking, the lower a company's payout ratios, the more resilient its dividend usually is.

Click here to see the company's payout ratio, plus analyst estimates of its future dividends.

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 business enters a downturn and the dividend is cut, the company could see its value fall precipitously. This is why it's a relief to see Powszechny Zaklad Ubezpieczen earnings per share are up 4.7% per annum 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. Powszechny Zaklad Ubezpieczen has seen its dividend decline 2.1% per annum on average over the past 10 years, which is not great to see. It's unusual to see earnings per share increasing at the same time as dividends per share have been in decline. We'd hope it's because the company is reinvesting heavily in its business, but it could also suggest business is lumpy.

The Bottom Line

Should investors buy Powszechny Zaklad Ubezpieczen for the upcoming dividend? Earnings per share have been growing at a reasonable rate, and the company is paying out a bit over half its earnings as dividends. At best we would put it on a watch-list to see if business conditions improve, as it doesn't look like a clear opportunity right now.

However if you're still interested in Powszechny Zaklad Ubezpieczen as a potential investment, you should definitely consider some of the risks involved with Powszechny Zaklad Ubezpieczen. Case in point: We've spotted 1 warning sign for Powszechny Zaklad Ubezpieczen you should be aware of.

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.