Income Investors Should Know That KABE Group AB (publ.) (STO:KABE B) Goes Ex-Dividend Soon

KABE Group AB (publ.) (STO:KABE B) is about to trade ex-dividend in the next 2 days. The ex-dividend date is two business days before a company's record date in most cases, which is the date on which the company determines which shareholders are entitled to receive a dividend. The ex-dividend date is important because any transaction on a stock needs to have been settled before the record date in order to be eligible for a dividend. Meaning, you will need to purchase KABE Group AB (publ.)'s shares before the 12th of November to receive the dividend, which will be paid on the 18th of November.

The company's next dividend payment will be kr02.00 per share, on the back of last year when the company paid a total of kr4.00 to shareholders. Calculating the last year's worth of payments shows that KABE Group AB (publ.) has a trailing yield of 1.9% on the current share price of kr0216.00. Dividends are a major contributor to investment returns for long term holders, but only if the dividend continues to be paid. That's why we should always check whether the dividend payments appear sustainable, and if the company is 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. Fortunately KABE Group AB (publ.)'s payout ratio is modest, at just 38% of profit. That said, even highly profitable companies sometimes might not generate enough cash to pay the dividend, which is why we should always check if the dividend is covered by cash flow. Thankfully its dividend payments took up just 39% of the free cash flow it generated, which is a comfortable payout ratio.

It's encouraging to see that the dividend is covered by both profit and cash flow. This generally suggests the dividend is sustainable, as long as earnings don't drop precipitously.

See our latest analysis for KABE Group AB (publ.)

Click here to see how much of its profit KABE Group AB (publ.) paid out over the last 12 months.

Have Earnings And Dividends Been Growing?

Companies with falling earnings are riskier for dividend shareholders. If business enters a downturn and the dividend is cut, the company could see its value fall precipitously. So we're not too excited that KABE Group AB (publ.)'s earnings are down 4.4% a year over the past five years.

Many investors will assess a company's dividend performance by evaluating how much the dividend payments have changed over time. In the last 10 years, KABE Group AB (publ.) has lifted its dividend by approximately 1.3% a year on average.

Final Takeaway

From a dividend perspective, should investors buy or avoid KABE Group AB (publ.)? Earnings per share are down meaningfully, although at least the company is paying out a low and conservative percentage of both its earnings and cash flow. It's definitely not great to see earnings falling, but at least there may be some buffer before the dividend needs to be cut. All things considered, we are not particularly enthused about KABE Group AB (publ.) from a dividend perspective.

So while KABE Group AB (publ.) looks good from a dividend perspective, it's always worthwhile being up to date with the risks involved in this stock. For example, we've found 1 warning sign for KABE Group AB (publ.) that we recommend you consider before investing in the business.

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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.