There's A Lot To Like About SALUS Ljubljana d. d's (LJSE:SALR) Upcoming €25.00 Dividend

It looks like SALUS, Ljubljana, d. d. (LJSE:SALR) is about to go ex-dividend in the next three days. You can purchase shares before the 12th of January in order to receive the dividend, which the company will pay on the 14th of January.

SALUS Ljubljana d. d's next dividend payment will be €25.00 per share, and in the last 12 months, the company paid a total of €45.00 per share. Calculating the last year's worth of payments shows that SALUS Ljubljana d. d has a trailing yield of 5.0% on the current share price of €900. We love seeing companies pay a dividend, but it's also important to be sure that laying the golden eggs isn't going to kill our golden goose! So we need to investigate whether SALUS Ljubljana d. d can afford its dividend, and if the dividend could grow.

Check out our latest analysis for SALUS Ljubljana d. d

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. Fortunately SALUS Ljubljana d. d's payout ratio is modest, at just 31% of profit. Yet cash flow is typically more important than profit for assessing dividend sustainability, so we should always check if the company generated enough cash to afford its dividend. Dividends consumed 67% of the company's free cash flow last year, which is within a normal range for most dividend-paying organisations.

It's encouraging to see that the dividend is covered by both profit and cash flow. This generally suggests the dividend is sustainable, as long as earnings don't drop precipitously.

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

Have Earnings And Dividends Been Growing?

Businesses with strong growth prospects usually make the best dividend payers, because it's easier to grow dividends when earnings per share are improving. Investors love dividends, so if earnings fall and the dividend is reduced, expect a stock to be sold off heavily at the same time. For this reason, we're glad to see SALUS Ljubljana d. d's earnings per share have risen 16% per annum over the last five years. SALUS Ljubljana d. d has an average payout ratio which suggests a balance between growing earnings and rewarding shareholders. This is a reasonable combination that could hint at some further dividend increases in the future.

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, SALUS Ljubljana d. d has lifted its dividend by approximately 1.2% a year on average. It's good to see both earnings and the dividend have improved - although the former has been rising much quicker than the latter, possibly due to the company reinvesting more of its profits in growth.

To Sum It Up

Should investors buy SALUS Ljubljana d. d for the upcoming dividend? Earnings per share have grown at a nice rate in recent times and over the last year, SALUS Ljubljana d. d paid out less than half its earnings and a bit over half its free cash flow. Overall we think this is an attractive combination and worthy of further research.

With that in mind, a critical part of thorough stock research is being aware of any risks that stock currently faces. To help with this, we've discovered 1 warning sign for SALUS Ljubljana d. d that you should be aware of before investing in their shares.

A common investment mistake is buying the first interesting stock you see. Here you can find a list of promising dividend stocks with a greater than 2% yield and an upcoming dividend.

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This article by Simply Wall St is general in nature. 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.
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