Polskie Towarzystwo Wspierania Przedsiebiorczosci S.A. (WSE:PTW) Goes Ex-Dividend Soon

Polskie Towarzystwo Wspierania Przedsiebiorczosci S.A. (WSE:PTW) stock is about to trade ex-dividend in three days. The ex-dividend date generally occurs two days 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. This means that investors who purchase Polskie Towarzystwo Wspierania Przedsiebiorczosci's shares on or after the 7th of July will not receive the dividend, which will be paid on the 16th of July.

The company's next dividend payment will be zł7.28 per share. Last year, in total, the company distributed zł7.28 to shareholders. Looking at the last 12 months of distributions, Polskie Towarzystwo Wspierania Przedsiebiorczosci has a trailing yield of approximately 7.4% on its current stock price of zł98.50. We love seeing companies pay a dividend, but it's also important to be sure that laying the golden eggs isn't going to kill our golden goose! We need to see whether the dividend is covered by earnings and if it's growing.

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If a company pays out more in dividends than it earned, then the dividend might become unsustainable - hardly an ideal situation. Polskie Towarzystwo Wspierania Przedsiebiorczosci distributed an unsustainably high 112% of its profit as dividends to shareholders last year. Without more sustainable payment behaviour, the dividend looks precarious. Yet cash flow is typically more important than profit for assessing dividend sustainability, so we should always check if the company generated enough cash to afford its dividend. Over the last year, it paid out more than three-quarters (83%) of its free cash flow generated, which is fairly high and may be starting to limit reinvestment in the business.

It's disappointing to see that the dividend was not covered by profits, but cash is more important from a dividend sustainability perspective, and Polskie Towarzystwo Wspierania Przedsiebiorczosci fortunately did generate enough cash to fund its dividend. Still, if the company repeatedly paid a dividend greater than its profits, we'd be concerned. Extraordinarily few companies are capable of persistently paying a dividend that is greater than their profits.

See our latest analysis for Polskie Towarzystwo Wspierania Przedsiebiorczosci

Click here to see how much of its profit Polskie Towarzystwo Wspierania Przedsiebiorczosci 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. Investors love dividends, so if earnings fall and the dividend is reduced, expect a stock to be sold off heavily at the same time. It's encouraging to see Polskie Towarzystwo Wspierania Przedsiebiorczosci has grown its earnings rapidly, up 54% a year for the past five years.

Another key way to measure a company's dividend prospects is by measuring its historical rate of dividend growth. Polskie Towarzystwo Wspierania Przedsiebiorczosci has delivered 36% dividend growth per year on average over the past 10 years. It's great to see earnings per share growing rapidly over several years, and dividends per share growing right along with it.

Final Takeaway

From a dividend perspective, should investors buy or avoid Polskie Towarzystwo Wspierania Przedsiebiorczosci? Growing earnings per share and a normal cashflow payout ratio is an ok combination, but we're concerned that the company is paying out such a high percentage of its income as dividends. All things considered, we are not particularly enthused about Polskie Towarzystwo Wspierania Przedsiebiorczosci from a dividend perspective.

However if you're still interested in Polskie Towarzystwo Wspierania Przedsiebiorczosci as a potential investment, you should definitely consider some of the risks involved with Polskie Towarzystwo Wspierania Przedsiebiorczosci. For instance, we've identified 2 warning signs for Polskie Towarzystwo Wspierania Przedsiebiorczosci (1 shouldn't be ignored) 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.