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Should You Buy Terveystalo Oyj (HEL:TTALO) For Its Upcoming Dividend In 2 Days?

Simply Wall St
·3-min read

It looks like Terveystalo Oyj (HEL:TTALO) is about to go ex-dividend in the next 2 days. You can purchase shares before the 3rd of April in order to receive the dividend, which the company will pay on the 15th of April.

Terveystalo Oyj's next dividend payment will be €0.13 per share. Last year, in total, the company distributed €0.26 to shareholders. Looking at the last 12 months of distributions, Terveystalo Oyj has a trailing yield of approximately 3.3% on its current stock price of €7.95. 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 Terveystalo Oyj can afford its dividend, and if the dividend could grow.

View our latest analysis for Terveystalo Oyj

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. Terveystalo Oyj paid out 61% of its earnings to investors last year, a normal payout level for most businesses.

Click here to see the company's payout ratio, plus analyst estimates of its future dividends.

HLSE:TTALO Historical Dividend Yield March 31st 2020
HLSE:TTALO Historical Dividend Yield March 31st 2020

Have Earnings And Dividends Been Growing?

Stocks in companies that generate sustainable earnings growth often make the best dividend prospects, as it is easier to lift the dividend when earnings are rising. 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 Terveystalo Oyj's earnings have been skyrocketing, up 52% per annum for the past five years. Management appears to be striking a nice balance between reinvesting for growth and paying dividends to shareholders. With a reasonable payout ratio, profits being reinvested, and some earnings growth, Terveystalo Oyj could have strong prospects for future increases to the dividend.

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, two years ago, Terveystalo Oyj has lifted its dividend by approximately 108% a year on average. It's great to see earnings per share growing rapidly over several years, and dividends per share growing right along with it.

To Sum It Up

Is Terveystalo Oyj an attractive dividend stock, or better left on the shelf? Earnings per share are growing at an attractive rate, and Terveystalo Oyj is paying out a bit over half its profits. In summary, Terveystalo Oyj appears to have some promise as a dividend stock, and we'd suggest taking a closer look at it.

With that in mind, a critical part of thorough stock research is being aware of any risks that stock currently faces. For example - Terveystalo Oyj has 4 warning signs we think you should be aware of.

We wouldn't recommend just buying the first dividend stock you see, though. Here's a list of interesting dividend stocks with a greater than 2% yield and an upcoming dividend.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.