BRD - Groupe Société Générale (BVB:BRD) Could Be A Buy For Its Upcoming Dividend

Some investors rely on dividends for growing their wealth, and if you're one of those dividend sleuths, you might be intrigued to know that BRD - Groupe Société Générale S.A. (BVB:BRD) is about to go ex-dividend in just three days. The ex-dividend date is usually set to be one business day before the record date which is the cut-off date on which you must be present on the company's books as a shareholder in order to receive the 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. In other words, investors can purchase BRD - Groupe Société Générale's shares before the 16th of May in order to be eligible for the dividend, which will be paid on the 6th of June.

The company's upcoming dividend is RON01.1725 a share, following on from the last 12 months, when the company distributed a total of RON0.92 per share to shareholders. Based on the last year's worth of payments, BRD - Groupe Société Générale stock has a trailing yield of around 4.4% on the current share price of RON020.80. 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! As a result, readers should always check whether BRD - Groupe Société Générale has been able to grow its dividends, or if the dividend might be cut.

See our latest analysis for BRD - Groupe Société Générale

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. Fortunately BRD - Groupe Société Générale's payout ratio is modest, at just 40% of profit.

When a company paid out less in dividends than it earned in profit, this generally suggests its dividend is affordable. The lower the % of its profit that it pays out, the greater the margin of safety for the dividend if the business enters a downturn.

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

Have Earnings And Dividends Been Growing?

Companies that aren't growing their earnings can still be valuable, but it is even more important to assess the sustainability of the dividend if it looks like the company will struggle to grow. If earnings decline and the company is forced to cut its dividend, investors could watch the value of their investment go up in smoke. With that in mind, we're not enthused to see that BRD - Groupe Société Générale's earnings per share have remained effectively flat over the past five years. Better than seeing them fall off a cliff, for sure, but the best dividend stocks grow their earnings meaningfully over the long run.

Another key way to measure a company's dividend prospects is by measuring its historical rate of dividend growth. BRD - Groupe Société Générale has delivered an average of 14% per year annual increase in its dividend, based on the past eight years of dividend payments.

The Bottom Line

Is BRD - Groupe Société Générale worth buying for its dividend? BRD - Groupe Société Générale has seen its earnings per share stagnate in recent years, although the company reinvests more than half of its profits in the business, which could bode well for its future prospects. Overall, BRD - Groupe Société Générale looks like a promising dividend stock in this analysis, and we think it would be worth investigating further.

So while BRD - Groupe Société Générale looks good from a dividend perspective, it's always worthwhile being up to date with the risks involved in this stock. For example - BRD - Groupe Société Générale has 1 warning sign we think you should be aware of.

A common investing mistake is buying the first interesting stock you see. Here you can find a full list of high-yield 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.