Raketech Group Holding PLC (STO:RAKE) Pays A €0.047 Dividend In Just Three Days

Readers hoping to buy Raketech Group Holding PLC (STO:RAKE) for its dividend will need to make their move shortly, as the stock is about to trade ex-dividend. The ex-dividend date is one business day before a company's record date, 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. Accordingly, Raketech Group Holding investors that purchase the stock on or after the 20th of November will not receive the dividend, which will be paid on the 28th of November.

The company's upcoming dividend is €0.047 a share, following on from the last 12 months, when the company distributed a total of €0.094 per share to shareholders. Last year's total dividend payments show that Raketech Group Holding has a trailing yield of 6.4% on the current share price of SEK16.8. If you buy this business for its dividend, you should have an idea of whether Raketech Group Holding's dividend is reliable and sustainable. As a result, readers should always check whether Raketech Group Holding has been able to grow its dividends, or if the dividend might be cut.

See our latest analysis for Raketech Group Holding

If a company pays out more in dividends than it earned, then the dividend might become unsustainable - hardly an ideal situation. Raketech Group Holding paid out a comfortable 42% of its profit last year. 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. Luckily it paid out just 16% of its free cash flow last year.

It's positive to see that Raketech Group Holding's dividend is covered by both profits and cash flow, since this is generally a sign that the dividend is sustainable, and a lower payout ratio usually suggests a greater margin of safety before the dividend gets cut.

Click here to see how much of its profit Raketech Group Holding paid out over the last 12 months.

Have Earnings And Dividends Been Growing?

Stocks with flat earnings can still be attractive dividend payers, but it is important to be more conservative with your approach and demand a greater margin for safety when it comes to dividend sustainability. If earnings fall far enough, the company could be forced to cut its dividend. That explains why we're not overly excited about Raketech Group Holding's flat earnings over the past five years. It's better than seeing them drop, certainly, but over the long term, all of the best dividend stocks are able to meaningfully grow their earnings per share.

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

Final Takeaway

Is Raketech Group Holding an attractive dividend stock, or better left on the shelf? While it's not great to see that earnings per share are effectively flat over the one-year period we checked, at least the payout ratios are low and conservative. In summary, while it has some positive characteristics, we're not inclined to race out and buy Raketech Group Holding today.

While it's tempting to invest in Raketech Group Holding for the dividends alone, you should always be mindful of the risks involved. For example - Raketech Group Holding has 3 warning signs we think 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.