Be Sure To Check Out Betsson AB (publ) (STO:BETS B) Before It Goes Ex-Dividend

Betsson AB (publ) (STO:BETS B) is about to trade ex-dividend in the next 4 days. The ex-dividend date is usually set to be two business days 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 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 Betsson's shares before the 9th of May to receive the dividend, which will be paid on the 15th of May.

The company's next dividend payment will be €0.4285 per share, and in the last 12 months, the company paid a total of €0.66 per share. Looking at the last 12 months of distributions, Betsson has a trailing yield of approximately 4.1% on its current stock price of kr0175.80. If you buy this business for its dividend, you should have an idea of whether Betsson's dividend is reliable and sustainable. As a result, readers should always check whether Betsson has been able to grow its dividends, or if the dividend might be cut.

We've discovered 1 warning sign about Betsson. View them for free.

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. Betsson paid out a comfortable 48% of its profit last year.

View our latest analysis for Betsson

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

Have Earnings And Dividends Been Growing?

Stocks in companies that generate sustainable earnings growth often make the best dividend prospects, as it is easier to lift the dividend when earnings are rising. If business enters a downturn and the dividend is cut, the company could see its value fall precipitously. It's encouraging to see Betsson has grown its earnings rapidly, up 20% a year for the past five years. Earnings per share have been growing very quickly, and the company is paying out a relatively low percentage of its profit and cash flow. This is a very favourable combination that can often lead to the dividend multiplying over the long term, if earnings grow and the company pays out a higher percentage of its earnings.

Another key way to measure a company's dividend prospects is by measuring its historical rate of dividend growth. Since the start of our data, 10 years ago, Betsson has lifted its dividend by approximately 4.7% a year on average. Earnings per share have been growing much quicker than dividends, potentially because Betsson is keeping back more of its profits to grow the business.

Final Takeaway

From a dividend perspective, should investors buy or avoid Betsson? When companies are growing rapidly and retaining a majority of the profits within the business, it's usually a sign that reinvesting earnings creates more value than paying dividends to shareholders. This strategy can add significant value to shareholders over the long term - as long as it's done without issuing too many new shares. In summary, Betsson appears to have some promise as a dividend stock, and we'd suggest taking a closer look at it.

So while Betsson looks good from a dividend perspective, it's always worthwhile being up to date with the risks involved in this stock. For example - Betsson has 1 warning sign we think you should be aware of.

A common investing mistake is buying the first interesting stock you see. Here you can find a full list of high-yield 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.