Be Sure To Check Out Asseco Poland S.A. (WSE:ACP) Before It Goes Ex-Dividend

Asseco Poland S.A. (WSE:ACP) stock is about to trade ex-dividend in three days. The ex-dividend date is two business days before a company's record date in most cases, which is the date on which the company determines which shareholders are entitled to receive a dividend. The ex-dividend date is important as the process of settlement involves at least two full business days. So if you miss that date, you would not show up on the company's books on the record date. Meaning, you will need to purchase Asseco Poland's shares before the 23rd of June to receive the dividend, which will be paid on the 30th of June.

The company's next dividend payment will be zł3.94 per share, and in the last 12 months, the company paid a total of zł3.94 per share. Looking at the last 12 months of distributions, Asseco Poland has a trailing yield of approximately 2.1% on its current stock price of zł184.50. If you buy this business for its dividend, you should have an idea of whether Asseco Poland's dividend is reliable and sustainable. As a result, readers should always check whether Asseco Poland has been able to grow its dividends, or if the dividend might be cut.

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Dividends are typically paid from company earnings. If a company pays more in dividends than it earned in profit, then the dividend could be unsustainable. Asseco Poland paid out 51% of its earnings to investors last year, a normal payout level for most businesses. Yet cash flows are even more important than profits for assessing a dividend, so we need to see if the company generated enough cash to pay its distribution. What's good is that dividends were well covered by free cash flow, with the company paying out 12% of its cash flow last year.

It's positive to see that Asseco Poland's dividend is covered by both profits and cash flow, since this is generally a sign that the dividend is sustainable, and a lower payout ratio usually suggests a greater margin of safety before the dividend gets cut.

See our latest analysis for Asseco Poland

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

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 business enters a downturn and the dividend is cut, the company could see its value fall precipitously. Fortunately for readers, Asseco Poland's earnings per share have been growing at 15% a year for the past five years. Asseco Poland is paying out a bit over half its earnings, which suggests the company is striking a balance between reinvesting in growth, and paying dividends. Given the quick rate of earnings per share growth and current level of payout, there may be a chance of further dividend increases in the future.

Another key way to measure a company's dividend prospects is by measuring its historical rate of dividend growth. Asseco Poland has delivered 4.2% dividend growth per year on average over the past 10 years. Earnings per share have been growing much quicker than dividends, potentially because Asseco Poland is keeping back more of its profits to grow the business.

The Bottom Line

Is Asseco Poland an attractive dividend stock, or better left on the shelf? We like Asseco Poland's growing earnings per share and the fact that - while its payout ratio is around average - it paid out a lower percentage of its cash flow. Overall we think this is an attractive combination and worthy of further research.

Ever wonder what the future holds for Asseco Poland? See what the four analysts we track are forecasting, with this visualisation of its historical and future estimated earnings and cash flow

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.