Four Days Left To Buy Neptis Spólka Akcyjna (WSE:YAN) Before The Ex-Dividend Date

Neptis Spólka Akcyjna (WSE:YAN) is about to trade ex-dividend in the next 4 days. Typically, the ex-dividend date is two business days before the record date, which is the date on which a company determines the shareholders eligible to receive a dividend. The ex-dividend date is important because any transaction on a stock needs to have been settled before the record date in order to be eligible for a dividend. Accordingly, Neptis Spólka Akcyjna investors that purchase the stock on or after the 30th of June will not receive the dividend, which will be paid on the 4th of July.

The company's next dividend payment will be zł5.62 per share. Last year, in total, the company distributed zł5.62 to shareholders. Based on the last year's worth of payments, Neptis Spólka Akcyjna has a trailing yield of 4.5% on the current stock price of zł125.00. 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.

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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. Neptis Spólka Akcyjna distributed an unsustainably high 146% of its profit as dividends to shareholders last year. Without extenuating circumstances, we'd consider the dividend at risk of a cut. That said, even highly profitable companies sometimes might not generate enough cash to pay the dividend, which is why we should always check if the dividend is covered by cash flow. The good news is it paid out just 20% of its free cash flow in the last year.

It's good to see that while Neptis Spólka Akcyjna's dividends were not covered by profits, at least they are affordable from a cash perspective. If executives were to continue paying more in dividends than the company reported in profits, we'd view this as a warning sign. Very few companies are able to sustainably pay dividends larger than their reported earnings.

View our latest analysis for Neptis Spólka Akcyjna

Click here to see how much of its profit Neptis Spólka Akcyjna 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. 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 Neptis Spólka Akcyjna's earnings have been skyrocketing, up 34% per annum for the past five years.

Another key way to measure a company's dividend prospects is by measuring its historical rate of dividend growth. In the last three years, Neptis Spólka Akcyjna has lifted its dividend by approximately 46% a year on average. It's exciting to see that both earnings and dividends per share have grown rapidly over the past few years.

Final Takeaway

Is Neptis Spólka Akcyjna worth buying for its dividend? Earnings per share have been rising nicely although, even though its cashflow payout ratio is low, we question why Neptis Spólka Akcyjna is paying out so much of its profit. To summarise, Neptis Spólka Akcyjna looks okay on this analysis, although it doesn't appear a stand-out opportunity.

While it's tempting to invest in Neptis Spólka Akcyjna for the dividends alone, you should always be mindful of the risks involved. For example, we've found 2 warning signs for Neptis Spólka Akcyjna that we recommend you consider before investing in the business.

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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.