Why You Might Be Interested In AVTECH Sweden AB (publ) (STO:AVT B) For Its Upcoming Dividend

AVTECH Sweden AB (publ) (STO:AVT B) is about to trade ex-dividend in the next 3 days. Typically, the ex-dividend date is two business days before the record date, which is the date on which a company determines the shareholders eligible to receive a dividend. 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. Accordingly, AVTECH Sweden investors that purchase the stock on or after the 15th of May will not receive the dividend, which will be paid on the 23rd of May.

The company's next dividend payment will be kr00.10 per share. Last year, in total, the company distributed kr0.10 to shareholders. Looking at the last 12 months of distributions, AVTECH Sweden has a trailing yield of approximately 1.1% on its current stock price of kr08.80. If you buy this business for its dividend, you should have an idea of whether AVTECH Sweden'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.

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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. That's why it's good to see AVTECH Sweden paying out a modest 43% of its earnings.

See our latest analysis for AVTECH Sweden

Click here to see how much of its profit AVTECH Sweden 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. That's why it's comforting to see AVTECH Sweden's earnings have been skyrocketing, up 105% per annum for the past five years.

Unfortunately AVTECH Sweden has only been paying a dividend for a year or so, so there's not much of a history to draw insight from.

The Bottom Line

Has AVTECH Sweden got what it takes to maintain its dividend payments? Typically, companies that are growing rapidly and paying out a low fraction of earnings are keeping the profits for reinvestment in the business. Perhaps even more importantly - this can sometimes signal management is focused on the long term future of the business. In summary, AVTECH Sweden appears to have some promise as a dividend stock, and we'd suggest taking a closer look at it.

So while AVTECH Sweden looks good from a dividend perspective, it's always worthwhile being up to date with the risks involved in this stock. Case in point: We've spotted 2 warning signs for AVTECH Sweden you should be aware of.

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.