Three Days Left Until SALUS, Ljubljana, d. d. (LJSE:SALR) Trades Ex-Dividend

SALUS, Ljubljana, d. d. (LJSE:SALR) stock is about to trade ex-dividend in three days. The ex-dividend date occurs one day 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 because any transaction on a stock needs to have been settled before the record date in order to be eligible for a dividend. Accordingly, SALUS Ljubljana d. d investors that purchase the stock on or after the 9th of January will not receive the dividend, which will be paid on the 13th of January.

The company's upcoming dividend is €40.00 a share, following on from the last 12 months, when the company distributed a total of €80.00 per share to shareholders. Based on the last year's worth of payments, SALUS Ljubljana d. d has a trailing yield of 3.8% on the current stock price of €2100.00. Dividends are an important source of income to many shareholders, but the health of the business is crucial to maintaining those dividends. So we need to investigate whether SALUS Ljubljana d. d can afford its dividend, and if the dividend could grow.

View our latest analysis for SALUS Ljubljana d. d

If a company pays out more in dividends than it earned, then the dividend might become unsustainable - hardly an ideal situation. SALUS Ljubljana d. d paid out 60% of its earnings to investors last year, a normal payout level for most businesses. 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. Over the last year, it paid out more than three-quarters (77%) of its free cash flow generated, which is fairly high and may be starting to limit reinvestment in the business.

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?

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 business enters a downturn and the dividend is cut, the company could see its value fall precipitously. That's why it's comforting to see SALUS Ljubljana d. d's earnings have been skyrocketing, up 24% per annum for the past five years.

The main way most investors will assess a company's dividend prospects is by checking the historical rate of dividend growth. Since the start of our data, 10 years ago, SALUS Ljubljana d. d has lifted its dividend by approximately 15% a year on average. Both per-share earnings and dividends have both been growing rapidly in recent times, which is great to see.

The Bottom Line

Has SALUS Ljubljana d. d got what it takes to maintain its dividend payments? It's good to see earnings are growing, since all of the best dividend stocks grow their earnings meaningfully over the long run. That's why we're glad to see SALUS Ljubljana d. d's earnings per share growing, although as we saw, the company is paying out more than half of its earnings and cashflow - 60% and 77% respectively. In summary, while it has some positive characteristics, we're not inclined to race out and buy SALUS Ljubljana d. d today.

With that in mind, a critical part of thorough stock research is being aware of any risks that stock currently faces. Our analysis shows 1 warning sign for SALUS Ljubljana d. d and you should be aware of this before buying any shares.

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.