Transilvania Investments Alliance S.A. (BVB:TRANSI) Looks Interesting, And It's About To Pay A Dividend

Transilvania Investments Alliance S.A. (BVB:TRANSI) stock is about to trade ex-dividend in 3 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 as the process of settlement involves two full business days. So if you miss that date, you would not show up on the company's books on the record date. Meaning, you will need to purchase Transilvania Investments Alliance's shares before the 30th of May to receive the dividend, which will be paid on the 23rd of June.

The company's next dividend payment will be RON0.014 per share, and in the last 12 months, the company paid a total of RON0.014 per share. Based on the last year's worth of payments, Transilvania Investments Alliance has a trailing yield of 4.6% on the current stock price of RON0.305. If you buy this business for its dividend, you should have an idea of whether Transilvania Investments Alliance's dividend is reliable and sustainable. So we need to check whether the dividend payments are covered, and if earnings are growing.

See our latest analysis for Transilvania Investments Alliance

If a company pays out more in dividends than it earned, then the dividend might become unsustainable - hardly an ideal situation. Transilvania Investments Alliance paid out a comfortable 47% of its profit last year.

Generally speaking, the lower a company's payout ratios, the more resilient its dividend usually is.

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 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. That explains why we're not overly excited about Transilvania Investments Alliance's flat earnings 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.

Many investors will assess a company's dividend performance by evaluating how much the dividend payments have changed over time. Transilvania Investments Alliance has seen its dividend decline 17% per annum on average over the past 10 years, which is not great to see.

Final Takeaway

Is Transilvania Investments Alliance worth buying for its dividend? Transilvania Investments Alliance 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. We think this is a pretty attractive combination, and would be interested in investigating Transilvania Investments Alliance more closely.

While it's tempting to invest in Transilvania Investments Alliance for the dividends alone, you should always be mindful of the risks involved. Our analysis shows 1 warning sign for Transilvania Investments Alliance and you should be aware of it before buying any shares.

Generally, we wouldn't recommend just buying the first dividend stock you see. Here's a curated list of interesting stocks that are strong dividend payers.

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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.