Only Four Days Left To Cash In On Investor's (STO:INVE A) Dividend

Readers hoping to buy Investor AB (publ) (STO:INVE A) for its dividend will need to make their move shortly, as the stock is about to trade ex-dividend. The ex-dividend date generally occurs two days before the record date, which is the day on which shareholders need to be on the company's books in order to receive a 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. This means that investors who purchase Investor's shares on or after the 8th of May will not receive the dividend, which will be paid on the 14th of May.

The company's upcoming dividend is kr03.75 a share, following on from the last 12 months, when the company distributed a total of kr5.20 per share to shareholders. Calculating the last year's worth of payments shows that Investor has a trailing yield of 1.8% on the current share price of kr0290.40. If you buy this business for its dividend, you should have an idea of whether Investor's dividend is reliable and sustainable. As a result, readers should always check whether Investor has been able to grow its dividends, or if the dividend might be cut.

Our free stock report includes 2 warning signs investors should be aware of before investing in Investor. Read for free now.

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. That's why it's good to see Investor paying out a modest 37% of its earnings.

When a company paid out less in dividends than it earned in profit, this generally suggests its dividend is affordable. The lower the % of its profit that it pays out, the greater the margin of safety for the dividend if the business enters a downturn.

Check out our latest analysis for Investor

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

Have Earnings And Dividends Been Growing?

When earnings decline, dividend companies become much harder to analyse and own safely. If business enters a downturn and the dividend is cut, the company could see its value fall precipitously. Investor's earnings per share have fallen at approximately 16% a year over the previous five years. When earnings per share fall, the maximum amount of dividends that can be paid also falls.

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, Investor has lifted its dividend by approximately 10% a year on average.

The Bottom Line

Should investors buy Investor for the upcoming dividend? Investor's earnings per share are down over the past five years, although it has the cushion of a low payout ratio, which would suggest a cut to the dividend is relatively unlikely. In sum this is a middling combination, and we find it hard to get excited about the company from a dividend perspective.

If you want to look further into Investor, it's worth knowing the risks this business faces. Case in point: We've spotted 2 warning signs for Investor 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.