Alumil Rom Industry S.A. (BVB:ALU) Pays A RON00.17 Dividend In Just Four Days

Alumil Rom Industry S.A. (BVB:ALU) is about to trade ex-dividend in the next 4 days. 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. The ex-dividend date is important as the process of settlement involves at least 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 Alumil Rom Industry's shares before the 4th of July to receive the dividend, which will be paid on the 25th of July.

The company's next dividend payment will be RON00.17 per share, on the back of last year when the company paid a total of RON0.17 to shareholders. Based on the last year's worth of payments, Alumil Rom Industry has a trailing yield of 5.6% on the current stock price of RON03.06. If you buy this business for its dividend, you should have an idea of whether Alumil Rom Industry's dividend is reliable and sustainable. As a result, readers should always check whether Alumil Rom Industry 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 Alumil Rom Industry paid out 100% of its profits as dividends to shareholders, suggesting the dividend is not well covered by earnings. A useful secondary check can be to evaluate whether Alumil Rom Industry generated enough free cash flow to afford its dividend. It paid out more than half (68%) of its free cash flow in the past year, which is within an average range for most companies.

It's good to see that while Alumil Rom Industry's dividends were not covered by profits, at least they are affordable from a cash perspective. If executives were to continue paying more in dividends than the company reported in profits, we'd view this as a warning sign. Extraordinarily few companies are capable of persistently paying a dividend that is greater than their profits.

View our latest analysis for Alumil Rom Industry

Click here to see how much of its profit Alumil Rom Industry paid out over the last 12 months.

Have Earnings And Dividends Been Growing?

Businesses with strong growth prospects usually make the best dividend payers, because it's easier to grow dividends when earnings per share are improving. If business enters a downturn and the dividend is cut, the company could see its value fall precipitously. For this reason, we're glad to see Alumil Rom Industry's earnings per share have risen 17% per annum over the last five years.

Many investors will assess a company's dividend performance by evaluating how much the dividend payments have changed over time. Alumil Rom Industry has delivered an average of 11% per year annual increase in its dividend, based on the past four years of dividend payments. It's great to see earnings per share growing rapidly over several years, and dividends per share growing right along with it.

The Bottom Line

From a dividend perspective, should investors buy or avoid Alumil Rom Industry? Growing earnings per share and a normal cashflow payout ratio is an ok combination, but we're concerned that the company is paying out such a high percentage of its income as dividends. In summary, it's hard to get excited about Alumil Rom Industry from a dividend perspective.

If you want to look further into Alumil Rom Industry, it's worth knowing the risks this business faces. To help with this, we've discovered 2 warning signs for Alumil Rom Industry that you should be aware of before investing in their shares.

If you're in the market for strong dividend payers, we recommend checking our selection of top dividend stocks.

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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.