NTT System S.A. (WSE:NTT) Looks Like A Good Stock, And It's Going Ex-Dividend Soon

It looks like NTT System S.A. (WSE:NTT) is about to go ex-dividend in the next three days. The ex-dividend date is one business day before the record date, which is the cut-off date for shareholders to be present on the company's books to be eligible for a dividend payment. 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. Thus, you can purchase NTT System's shares before the 24th of September in order to receive the dividend, which the company will pay on the 27th of September.

The company's next dividend payment will be zł0.15 per share, and in the last 12 months, the company paid a total of zł0.15 per share. Last year's total dividend payments show that NTT System has a trailing yield of 2.0% on the current share price of zł7.66. If you buy this business for its dividend, you should have an idea of whether NTT System's dividend is reliable and sustainable. As a result, readers should always check whether NTT System has been able to grow its dividends, or if the dividend might be cut.

View our latest analysis for NTT System

Dividends are usually paid out of company profits, so if a company pays out more than it earned then its dividend is usually at greater risk of being cut. NTT System has a low and conservative payout ratio of just 4.9% of its income after tax.

Click here to see how much of its profit NTT System 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 business enters a downturn and the dividend is cut, the company could see its value fall precipitously. That's why it's comforting to see NTT System's earnings have been skyrocketing, up 39% per annum for the past five years. NTT System earnings per share have been sprinting ahead like the Road Runner at a track and field day; scarcely stopping even for a cheeky "beep-beep". We also like that it is reinvesting most of its profits in its business.'

Many investors will assess a company's dividend performance by evaluating how much the dividend payments have changed over time. In the last 10 years, NTT System has lifted its dividend by approximately 2.3% a year on average. Earnings per share have been growing much quicker than dividends, potentially because NTT System is keeping back more of its profits to grow the business.

Final Takeaway

From a dividend perspective, should investors buy or avoid NTT System? Companies like NTT System that are growing rapidly and paying out a low fraction of earnings, are usually reinvesting heavily in their business. Perhaps even more importantly - this can sometimes signal management is focused on the long term future of the business. We think this is a pretty attractive combination, and would be interested in investigating NTT System more closely.

So while NTT System looks good from a dividend perspective, it's always worthwhile being up to date with the risks involved in this stock. For example - NTT System has 1 warning sign we think 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.