Yahoo Finance Don't Buy Bijou Brigitte modische Accessoires Aktiengesellschaft (ETR:BIJ) For Its Next Dividend Without Doing These Checks
Bijou Brigitte modische Accessoires Aktiengesellschaft (ETR:BIJ) stock is about to trade ex-dividend in 4 days. The ex-dividend date is usually set to be one business day 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. It is important to be aware of the ex-dividend date because any trade on the stock needs to have been settled on or before the record date. Meaning, you will need to purchase Bijou Brigitte modische Accessoires' shares before the 28th of June to receive the dividend, which will be paid on the 2nd of July.
The company's next dividend payment will be €3.50 per share. Last year, in total, the company distributed €3.50 to shareholders. Based on the last year's worth of payments, Bijou Brigitte modische Accessoires has a trailing yield of 8.6% on the current stock price of €40.75. If you buy this business for its dividend, you should have an idea of whether Bijou Brigitte modische Accessoires's dividend is reliable and sustainable. As a result, readers should always check whether Bijou Brigitte modische Accessoires has been able to grow its dividends, or if the dividend might be cut.
View our latest analysis for Bijou Brigitte modische Accessoires
Dividends are typically paid out of company income, so if a company pays out more than it earned, its dividend is usually at a higher risk of being cut. Bijou Brigitte modische Accessoires paid out 112% of profit in the past year, which we think is typically not sustainable unless there are mitigating characteristics such as unusually strong cash flow or a large cash balance. A useful secondary check can be to evaluate whether Bijou Brigitte modische Accessoires generated enough free cash flow to afford its dividend. Over the last year it paid out 64% of its free cash flow as dividends, within the usual range for most companies.
It's good to see that while Bijou Brigitte modische Accessoires's dividends were not covered by profits, at least they are affordable from a cash perspective. If executives were to continue paying more in dividends than the company reported in profits, we'd view this as a warning sign. Very few companies are able to sustainably pay dividends larger than their reported earnings.
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. If business enters a downturn and the dividend is cut, the company could see its value fall precipitously. This is why it's a relief to see Bijou Brigitte modische Accessoires earnings per share are up 2.7% per annum over the last five years.
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 Bijou Brigitte modische Accessoires dividends are largely the same as they were 10 years ago.
To Sum It Up
Should investors buy Bijou Brigitte modische Accessoires for the upcoming dividend? While earnings per share have been growing slowly, Bijou Brigitte modische Accessoires is paying out an uncomfortably high percentage of its earnings. However it did pay out a lower percentage of its cashflow. Bottom line: Bijou Brigitte modische Accessoires has some unfortunate characteristics that we think could lead to sub-optimal outcomes for dividend investors.
Although, if you're still interested in Bijou Brigitte modische Accessoires and want to know more, you'll find it very useful to know what risks this stock faces. To help with this, we've discovered 2 warning signs for Bijou Brigitte modische Accessoires that you should be aware of before investing in their 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.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com
