S.C. Foraj Sonde S.A. (BVB:FOJE) Looks Interesting, And It's About To Pay A Dividend

Readers hoping to buy S.C. Foraj Sonde S.A. (BVB:FOJE) for its dividend will need to make their move shortly, as the stock is about to trade ex-dividend. The ex-dividend date is commonly two business days before the record date, which is the cut-off date for shareholders to be present on the company's books to be eligible for a dividend payment. 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. This means that investors who purchase S.C. Foraj Sonde's shares on or after the 14th of May will not receive the dividend, which will be paid on the 4th of June.

The company's next dividend payment will be RON00.679 per share. Last year, in total, the company distributed RON0.80 to shareholders. Based on the last year's worth of payments, S.C. Foraj Sonde has a trailing yield of 6.1% on the current stock price of RON013.20. If you buy this business for its dividend, you should have an idea of whether S.C. Foraj Sonde's dividend is reliable and sustainable. That's why we should always check whether the dividend payments appear sustainable, and if the company is growing.

AI is about to change healthcare. These 20 stocks are working on everything from early diagnostics to drug discovery. The best part - they are all under $10bn in marketcap - there is still time to get in early.

Dividends are typically paid from company earnings. If a company pays more in dividends than it earned in profit, then the dividend could be unsustainable. Fortunately S.C. Foraj Sonde's payout ratio is modest, at just 47% of profit.

View our latest analysis for S.C. Foraj Sonde

Click here to see how much of its profit S.C. Foraj Sonde paid out over the last 12 months.

Have Earnings And Dividends Been Growing?

Companies with consistently growing earnings per share generally make the best dividend stocks, as they usually find it easier to grow dividends per share. 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's why we're glad to see earnings per share up 11% over the past 12 months.

We do note though, one year is too short a time to be drawing strong conclusions about a company's future growth prospects.

Many investors will assess a company's dividend performance by evaluating how much the dividend payments have changed over time. S.C. Foraj Sonde has seen its dividend decline 5.7% per annum on average over the past two years, which is not great to see. S.C. Foraj Sonde is a rare case where dividends have been decreasing at the same time as earnings per share have been improving. It's unusual to see, and could point to unstable conditions in the core business, or more rarely an intensified focus on reinvesting profits.

To Sum It Up

From a dividend perspective, should investors buy or avoid S.C. Foraj Sonde? Typically, companies that are growing rapidly and paying out a low fraction of earnings are keeping the profits for reinvestment in the business. This is one of the most attractive investment combinations under this analysis, as it can create substantial value for investors over the long run. S.C. Foraj Sonde ticks a lot of boxes for us from a dividend perspective, and we think these characteristics should mark the company as deserving of further attention.

In light of that, while S.C. Foraj Sonde has an appealing dividend, it's worth knowing the risks involved with this stock. In terms of investment risks, we've identified 1 warning sign with S.C. Foraj Sonde and understanding them should be part of your investment process.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.