Sifi Cluj Retail SA (BVB:ARCU) Goes Ex-Dividend Soon

Sifi Cluj Retail SA (BVB:ARCU) stock is about to trade ex-dividend in 3 days. The ex-dividend date generally occurs two days before the record date, which is the day on which shareholders need to be on the company's books in order to receive a dividend. It is important to be aware of the ex-dividend date because any trade on the stock needs to have been settled on or before the record date. Therefore, if you purchase Sifi Cluj Retail's shares on or after the 16th of October, you won't be eligible to receive the dividend, when it is paid on the 27th of October.

The company's next dividend payment will be RON01.52 per share. Last year, in total, the company distributed RON0.22 to shareholders. Calculating the last year's worth of payments shows that Sifi Cluj Retail has a trailing yield of 3.6% on the current share price of RON06.10. If you buy this business for its dividend, you should have an idea of whether Sifi Cluj Retail's dividend is reliable and sustainable. As a result, readers should always check whether Sifi Cluj Retail has been able to grow its dividends, or if the dividend might be cut.

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Dividends are typically paid out of company income, so if a company pays out more than it earned, its dividend is usually at a higher risk of being cut. Last year Sifi Cluj Retail paid out 99% of its profits as dividends to shareholders, suggesting the dividend is not well covered by earnings. 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. Luckily it paid out just 21% of its free cash flow last year.

It's good to see that while Sifi Cluj Retail's dividends were not well covered by profits, at least they are affordable from a cash perspective. Still, if the company continues paying out such a high percentage of its profits, the dividend could be at risk if business turns sour.

View our latest analysis for Sifi Cluj Retail

Click here to see how much of its profit Sifi Cluj Retail 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. Investors love dividends, so if earnings fall and the dividend is reduced, expect a stock to be sold off heavily at the same time. That's why it's comforting to see Sifi Cluj Retail's earnings have been skyrocketing, up 44% per annum for the past five years.

Unfortunately Sifi Cluj Retail has only been paying a dividend for a year or so, so there's not much of a history to draw insight from.

To Sum It Up

Is Sifi Cluj Retail worth buying for its dividend? It's good to see earnings per share growing and low cashflow payout ratio, although we're uncomfortable with Sifi Cluj Retail's paying out such a high percentage of its profit. All things considered, we are not particularly enthused about Sifi Cluj Retail from a dividend perspective.

So while Sifi Cluj Retail looks good from a dividend perspective, it's always worthwhile being up to date with the risks involved in this stock. For example, we've found 4 warning signs for Sifi Cluj Retail 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.