Why You Might Be Interested In Przedsiebiorstwo Produkcyjno - Handlowe KOMPAP S.A. (WSE:KMP) For Its Upcoming Dividend

Przedsiebiorstwo Produkcyjno - Handlowe KOMPAP S.A. (WSE:KMP) stock is about to trade ex-dividend in three 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. It is important to be aware of the ex-dividend date because any trade on the stock needs to have been settled on or before the record date. Thus, you can purchase Przedsiebiorstwo Produkcyjno - Handlowe KOMPAP's shares before the 30th of May in order to receive the dividend, which the company will pay on the 13th of June.

The upcoming dividend for Przedsiebiorstwo Produkcyjno - Handlowe KOMPAP will put a total of zł1.00 per share in shareholders' pockets, up from last year's total dividends of zł0.45. Dividends are an important source of income to many shareholders, but the health of the business is crucial to maintaining those dividends. As a result, readers should always check whether Przedsiebiorstwo Produkcyjno - Handlowe KOMPAP has been able to grow its dividends, or if the dividend might be cut.

Check out our latest analysis for Przedsiebiorstwo Produkcyjno - Handlowe KOMPAP

If a company pays out more in dividends than it earned, then the dividend might become unsustainable - hardly an ideal situation. Fortunately Przedsiebiorstwo Produkcyjno - Handlowe KOMPAP's payout ratio is modest, at just 28% of profit. A useful secondary check can be to evaluate whether Przedsiebiorstwo Produkcyjno - Handlowe KOMPAP generated enough free cash flow to afford its dividend. What's good is that dividends were well covered by free cash flow, with the company paying out 16% of its cash flow last year.

It's encouraging to see that the dividend is covered by both profit and cash flow. This generally suggests the dividend is sustainable, as long as earnings don't drop precipitously.

Click here to see how much of its profit Przedsiebiorstwo Produkcyjno - Handlowe KOMPAP paid out over the last 12 months.

Have Earnings And Dividends Been Growing?

Companies with consistently growing earnings per share generally make the best dividend stocks, as they usually find it easier to grow dividends per share. If earnings decline and the company is forced to cut its dividend, investors could watch the value of their investment go up in smoke. That's why it's comforting to see Przedsiebiorstwo Produkcyjno - Handlowe KOMPAP's earnings have been skyrocketing, up 21% per annum for the past five years. Earnings per share have been growing very quickly, and the company is paying out a relatively low percentage of its profit and cash flow. Companies with growing earnings and low payout ratios are often the best long-term dividend stocks, as the company can both grow its earnings and increase the percentage of earnings that it pays out, essentially multiplying the dividend.

Many investors will assess a company's dividend performance by evaluating how much the dividend payments have changed over time. Przedsiebiorstwo Produkcyjno - Handlowe KOMPAP has delivered 26% dividend growth per year on average over the past seven years. It's great to see earnings per share growing rapidly over several years, and dividends per share growing right along with it.

The Bottom Line

From a dividend perspective, should investors buy or avoid Przedsiebiorstwo Produkcyjno - Handlowe KOMPAP? Przedsiebiorstwo Produkcyjno - Handlowe KOMPAP has grown its earnings per share while simultaneously reinvesting in the business. Unfortunately it's cut the dividend at least once in the past seven years, but the conservative payout ratio makes the current dividend look sustainable. Przedsiebiorstwo Produkcyjno - Handlowe KOMPAP looks solid on this analysis overall, and we'd definitely consider investigating it more closely.

So while Przedsiebiorstwo Produkcyjno - Handlowe KOMPAP looks good from a dividend perspective, it's always worthwhile being up to date with the risks involved in this stock. For example, we've found 5 warning signs for Przedsiebiorstwo Produkcyjno - Handlowe KOMPAP (1 can't be ignored!) 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.