Bokusgruppen AB (publ) (STO:BOKUS) Goes Ex-Dividend Soon

Bokusgruppen AB (publ) (STO:BOKUS) is about to trade ex-dividend in the next three 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. This means that investors who purchase Bokusgruppen's shares on or after the 6th of November will not receive the dividend, which will be paid on the 12th of November.

The company's next dividend payment will be kr01.80 per share. Last year, in total, the company distributed kr3.60 to shareholders. Based on the last year's worth of payments, Bokusgruppen stock has a trailing yield of around 4.2% on the current share price of kr086.00. Dividends are an important source of income to many shareholders, but the health of the business is crucial to maintaining those dividends. 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. Last year, Bokusgruppen paid out 91% of its income as dividends, which is above a level that we're comfortable with, especially if the company needs to reinvest in its business. 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. It distributed 33% of its free cash flow as dividends, a comfortable payout level for most companies.

It's good to see that while Bokusgruppen's dividends were not well covered by profits, at least they are affordable from a cash perspective. Still, if this were to happen repeatedly, we'd be concerned about whether the dividend is sustainable in a downturn.

See our latest analysis for Bokusgruppen

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

Have Earnings And Dividends Been Growing?

Companies with consistently growing earnings per share generally make the best dividend stocks, as they usually find it easier to grow dividends per share. If earnings decline and the company is forced to cut its dividend, investors could watch the value of their investment go up in smoke. That's why it's comforting to see Bokusgruppen's earnings have been skyrocketing, up 66% per annum for the past five years.

Another key way to measure a company's dividend prospects is by measuring its historical rate of dividend growth. In the past four years, Bokusgruppen has increased its dividend at approximately 4.7% a year on average. Earnings per share have been growing much quicker than dividends, potentially because Bokusgruppen is keeping back more of its profits to grow the business.

The Bottom Line

Should investors buy Bokusgruppen for the upcoming dividend? Earnings per share have been rising nicely although, even though its cashflow payout ratio is low, we question why Bokusgruppen is paying out so much of its profit. Overall, it's not a bad combination, but we feel that there are likely more attractive dividend prospects out there.

While it's tempting to invest in Bokusgruppen for the dividends alone, you should always be mindful of the risks involved. For example, we've found 1 warning sign for Bokusgruppen that we recommend you consider before investing in the business.

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.