Terme Catez, d.d. (LJSE:TCRG) Passed Our Checks, And It's About To Pay A €1.01 Dividend

Terme Catez, d.d. (LJSE:TCRG) stock is about to trade ex-dividend in 2 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. Accordingly, Terme Catez d.d investors that purchase the stock on or after the 23rd of December will not receive the dividend, which will be paid on the 29th of December.

The company's next dividend payment will be €1.01 per share, on the back of last year when the company paid a total of €0.50 to shareholders. Last year's total dividend payments show that Terme Catez d.d has a trailing yield of 1.4% on the current share price of €70.00. Dividends are a major contributor to investment returns for long term holders, but only if the dividend continues to be paid. So we need to investigate whether Terme Catez d.d can afford its dividend, and if the dividend could grow.

This technology could replace computers: discover the 20 stocks are working to make quantum computing a reality.

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. Terme Catez d.d is paying out just 6.3% of its profit after tax, which is comfortably low and leaves plenty of breathing room in the case of adverse events.

Check out our latest analysis for Terme Catez d.d

Click here to see how much of its profit Terme Catez d.d 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. For that reason, it's encouraging to see Terme Catez d.d's earnings over the past year have risen 34%. While we'd be remiss not to point out that a year is a very short time in dividend investing, it's an encouraging sign so far.

One year is not very long in the grand scheme of things though, so we wouldn't draw too strong a conclusion based on these results.

The main way most investors will assess a company's dividend prospects is by checking the historical rate of dividend growth. It looks like the Terme Catez d.d dividends are largely the same as they were 10 years ago.

To Sum It Up

Should investors buy Terme Catez d.d for the upcoming dividend? 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. Perhaps even more importantly - this can sometimes signal management is focused on the long term future of the business. Overall, Terme Catez d.d looks like a promising dividend stock in this analysis, and we think it would be worth investigating further.

In light of that, while Terme Catez d.d has an appealing dividend, it's worth knowing the risks involved with this stock. We've identified 3 warning signs with Terme Catez d.d (at least 1 which is potentially serious), and understanding them should be part of your investment process.

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

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.