We Wouldn't Be Too Quick To Buy Societatea Conpet S.A. (BVB:COTE) Before It Goes Ex-Dividend

By
Simply Wall St
Published
June 02, 2021
BVB:COTE
Source: Shutterstock

Societatea Conpet S.A. (BVB:COTE) 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 of consequence because whenever a stock is bought or sold, the trade takes at least two business day to settle. In other words, investors can purchase Societatea Conpet's shares before the 7th of June in order to be eligible for the dividend, which will be paid on the 24th of June.

The company's next dividend payment will be RON6.90 per share, on the back of last year when the company paid a total of RON6.90 to shareholders. Last year's total dividend payments show that Societatea Conpet has a trailing yield of 7.5% on the current share price of RON92.4. 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.

See our latest analysis for Societatea Conpet

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. Last year Societatea Conpet paid out 103% of its profits as dividends to shareholders, suggesting the dividend is not well covered by earnings.

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

historic-dividend
BVB:COTE Historic Dividend June 3rd 2021

Have Earnings And Dividends Been Growing?

Stocks with flat earnings can still be attractive dividend payers, but it is important to be more conservative with your approach and demand a greater margin for safety when it comes to dividend sustainability. Investors love dividends, so if earnings fall and the dividend is reduced, expect a stock to be sold off heavily at the same time. With that in mind, we're not enthused to see that Societatea Conpet's earnings per share have remained effectively flat over the past five years. It's better than seeing them drop, certainly, but over the long term, all of the best dividend stocks are able to meaningfully grow their earnings per share.

Another key way to measure a company's dividend prospects is by measuring its historical rate of dividend growth. Societatea Conpet has delivered an average of 5.5% per year annual increase in its dividend, based on the past 10 years of dividend payments.

To Sum It Up

Is Societatea Conpet worth buying for its dividend? Earnings per share have not grown at all and Societatea Conpet is paying out an uncomfortably high percentage of its profit as dividends. This is not an overtly appealing combination of characteristics, and we're just not that interested in this company's dividend.

With that being said, if you're still considering Societatea Conpet as an investment, you'll find it beneficial to know what risks this stock is facing. For example, we've found 3 warning signs for Societatea Conpet that we recommend you consider before investing in the business.

We wouldn't recommend just buying the first dividend stock you see, though. Here's a list of interesting dividend stocks with a greater than 2% yield and an upcoming dividend.

If you’re looking to trade a wide range of investments, open an account with the lowest-cost* platform trusted by professionals, Interactive Brokers. Their clients from over 200 countries and territories trade stocks, options, futures, forex, bonds and funds worldwide from a single integrated account. Promoted


Discounted cash flow calculation for every stock

Simply Wall St does a detailed discounted cash flow calculation every 6 hours for every stock on the market, so if you want to find the intrinsic value of any company just search here. It’s FREE.

Make Confident Investment Decisions

Simply Wall St's Editorial Team provides unbiased, factual reporting on global stocks using in-depth fundamental analysis.
Find out more about our editorial guidelines and team.