Here's What We Like About Pozavarovalnica Sava d.d's (LJSE:POSR) Upcoming Dividend

Pozavarovalnica Sava, d.d. (LJSE:POSR) stock is about to trade ex-dividend in 4 days. The ex-dividend date is one business day before a company's record date, which is the date on which the company determines which shareholders are entitled to receive a dividend. The ex-dividend date is an important date to be aware of as any purchase of the stock made on or after this date might mean a late settlement that doesn't show on the record date. This means that investors who purchase Pozavarovalnica Sava d.d's shares on or after the 19th of June will not receive the dividend, which will be paid on the 21st of June.

The company's upcoming dividend is €1.60 a share, following on from the last 12 months, when the company distributed a total of €1.60 per share to shareholders. Based on the last year's worth of payments, Pozavarovalnica Sava d.d stock has a trailing yield of around 6.2% on the current share price of €25.9. Dividends are a major contributor to investment returns for long term holders, but only if the dividend continues to be paid. As a result, readers should always check whether Pozavarovalnica Sava d.d has been able to grow its dividends, or if the dividend might be cut.

See our latest analysis for Pozavarovalnica Sava d.d

If a company pays out more in dividends than it earned, then the dividend might become unsustainable - hardly an ideal situation. That's why it's good to see Pozavarovalnica Sava d.d paying out a modest 31% of its earnings.

Companies that pay out less in dividends than they earn in profits generally have more sustainable dividends. The lower the payout ratio, the more wiggle room the business has before it could be forced to cut the dividend.

Click here to see how much of its profit Pozavarovalnica Sava 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. That's why it's comforting to see Pozavarovalnica Sava d.d's earnings have been skyrocketing, up 21% per annum for the past five years.

Many investors will assess a company's dividend performance by evaluating how much the dividend payments have changed over time. In the last nine years, Pozavarovalnica Sava d.d has lifted its dividend by approximately 22% a year on average. It's exciting to see that both earnings and dividends per share have grown rapidly over the past few years.

The Bottom Line

From a dividend perspective, should investors buy or avoid Pozavarovalnica Sava d.d? Typically, companies that are growing rapidly and paying out a low fraction of earnings are keeping the profits for reinvestment in the business. This strategy can add significant value to shareholders over the long term - as long as it's done without issuing too many new shares. Overall, Pozavarovalnica Sava d.d looks like a promising dividend stock in this analysis, and we think it would be worth investigating further.

On that note, you'll want to research what risks Pozavarovalnica Sava d.d is facing. For instance, we've identified 2 warning signs for Pozavarovalnica Sava d.d (1 is a bit unpleasant) you should be aware of.

If you're in the market for strong dividend payers, we recommend checking our selection of top 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.