PRO-LOG Spólka Akcyjna (WSE:PRL) Goes Ex-Dividend Soon

PRO-LOG Spólka Akcyjna (WSE:PRL) is about to trade ex-dividend in the next 3 days. You can purchase shares before the 11th of December in order to receive the dividend, which the company will pay on the 21st of December.

PRO-LOG Spólka Akcyjna's next dividend payment will be zł2.10 per share, and in the last 12 months, the company paid a total of zł2.30 per share. Based on the last year's worth of payments, PRO-LOG Spólka Akcyjna has a trailing yield of 8.8% on the current stock price of PLN26. 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! That's why we should always check whether the dividend payments appear sustainable, and if the company is growing.

Check out our latest analysis for PRO-LOG Spólka Akcyjna

If a company pays out more in dividends than it earned, then the dividend might become unsustainable - hardly an ideal situation. PRO-LOG Spólka Akcyjna paid out 75% of its earnings to investors last year, a normal payout level for most businesses. A useful secondary check can be to evaluate whether PRO-LOG Spólka Akcyjna generated enough free cash flow to afford its dividend. Over the last year it paid out 54% of its free cash flow as dividends, within the usual range for most companies.

It's positive to see that PRO-LOG Spólka Akcyjna'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.

Click here to see how much of its profit PRO-LOG Spólka Akcyjna paid out over the last 12 months.

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 earnings fall far enough, the company could be forced to cut its dividend. For this reason, we're glad to see PRO-LOG Spólka Akcyjna's earnings per share have risen 17% per annum over the last five years. PRO-LOG Spólka Akcyjna has an average payout ratio which suggests a balance between growing earnings and rewarding shareholders. This is a reasonable combination that could hint at some 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. In the past eight years, PRO-LOG Spólka Akcyjna has increased its dividend at approximately 7.4% a year on average. We're glad to see dividends rising alongside earnings over a number of years, which may be a sign the company intends to share the growth with shareholders.

The Bottom Line

Has PRO-LOG Spólka Akcyjna got what it takes to maintain its dividend payments? It's good to see earnings are growing, since all of the best dividend stocks grow their earnings meaningfully over the long run. However, we'd also note that PRO-LOG Spólka Akcyjna is paying out more than half of its earnings and cash flow as profits, which could limit the dividend growth if earnings growth slows. Overall, it's not a bad combination, but we feel that there are likely more attractive dividend prospects out there.

In light of that, while PRO-LOG Spólka Akcyjna has an appealing dividend, it's worth knowing the risks involved with this stock. To that end, you should learn about the 3 warning signs we've spotted with PRO-LOG Spólka Akcyjna (including 1 which can't be ignored).

If you're in the market for dividend stocks, we recommend checking our list of top dividend stocks with a greater than 2% yield and an upcoming dividend.

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This article by Simply Wall St is general in nature. 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.
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