Should Income Investors Look At Transilvania Investments Alliance S.A. (BVB:TRANSI) Before Its Ex-Dividend?

Transilvania Investments Alliance S.A. (BVB:TRANSI) stock is about to trade ex-dividend in 4 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. 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. Accordingly, Transilvania Investments Alliance investors that purchase the stock on or after the 17th of October will not receive the dividend, which will be paid on the 28th of October.

The company's next dividend payment will be RON00.015 per share. Last year, in total, the company distributed RON0.015 to shareholders. Looking at the last 12 months of distributions, Transilvania Investments Alliance has a trailing yield of approximately 3.1% on its current stock price of RON00.487. Dividends are an important source of income to many shareholders, but the health of the business is crucial to maintaining those dividends. So we need to check whether the dividend payments are covered, and if earnings are growing.

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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. Transilvania Investments Alliance paid out a comfortable 39% of its profit last year.

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.

View our latest analysis for Transilvania Investments Alliance

Click here to see how much of its profit Transilvania Investments Alliance paid out over the last 12 months.

Have Earnings And Dividends Been Growing?

Companies with falling earnings are riskier for dividend shareholders. If earnings fall far enough, the company could be forced to cut its dividend. Transilvania Investments Alliance's earnings per share have fallen at approximately 14% a year over the previous five years. When earnings per share fall, the maximum amount of dividends that can be paid also falls.

The main way most investors will assess a company's dividend prospects is by checking the historical rate of dividend growth. In the last 10 years, Transilvania Investments Alliance has lifted its dividend by approximately 1.8% a year on average.

Final Takeaway

Is Transilvania Investments Alliance an attractive dividend stock, or better left on the shelf? Earnings per share have shrunk noticeably in recent years, although we like that the company has a low payout ratio. This could suggest a cut to the dividend may not be a major risk in the near future. In sum this is a middling combination, and we find it hard to get excited about the company from a dividend perspective.

If you want to look further into Transilvania Investments Alliance, it's worth knowing the risks this business faces. For example - Transilvania Investments Alliance has 1 warning sign we think you should be aware of.

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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.