Yahoo Finance Is It Smart To Buy Derichebourg SA (EPA:DBG) Before It Goes Ex-Dividend?
It looks like Derichebourg SA (EPA:DBG) is about to go ex-dividend in the next 3 days. Ex-dividend means that investors that purchase the stock on or after the 7th of February will not receive this dividend, which will be paid on the 11th of February.
Derichebourg's upcoming dividend is €0.11 a share, following on from the last 12 months, when the company distributed a total of €0.11 per share to shareholders. Based on the last year's worth of payments, Derichebourg has a trailing yield of 3.3% on the current stock price of €3.286. Dividends are an important source of income to many shareholders, but the health of the business is crucial to maintaining those dividends. That's why we should always check whether the dividend payments appear sustainable, and if the company is growing.
View our latest analysis for Derichebourg
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. Derichebourg paid out a comfortable 32% of its profit last year. A useful secondary check can be to evaluate whether Derichebourg generated enough free cash flow to afford its dividend. It distributed 30% of its free cash flow as dividends, a comfortable payout level for most companies.
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 the company's payout ratio, plus analyst estimates of its future dividends.
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 Derichebourg's earnings have been skyrocketing, up 27% per annum for the past five years. Derichebourg is paying out less than half its earnings and cash flow, while simultaneously growing earnings per share at a rapid clip. This is a very favourable combination that can often lead to the dividend multiplying over the long term, if earnings grow and the company pays out a higher percentage of its earnings.
Many investors will assess a company's dividend performance by evaluating how much the dividend payments have changed over time. In the last eight years, Derichebourg has lifted its dividend by approximately 2.5% a year on average. Earnings per share have been growing much quicker than dividends, potentially because Derichebourg is keeping back more of its profits to grow the business.
Final Takeaway
Is Derichebourg an attractive dividend stock, or better left on the shelf? Derichebourg has grown its earnings per share while simultaneously reinvesting in the business. Unfortunately it's cut the dividend at least once in the past eight years, but the conservative payout ratio makes the current dividend look sustainable. Overall we think this is an attractive combination and worthy of further research.
Ever wonder what the future holds for Derichebourg? See what the four analysts we track are forecasting, with this visualisation of its historical and future estimated earnings and cash flow
If you're in the market for dividend stocks, we recommend checking our list of top 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.
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