Yahoo Finance Is It Smart To Buy Openjobmetis S.p.A. (BIT:OJM) Before It Goes Ex-Dividend?
Openjobmetis S.p.A. (BIT:OJM) is about to trade ex-dividend in the next 4 days. This means that investors who purchase shares on or after the 11th of May will not receive the dividend, which will be paid on the 13th of May.
Openjobmetis's upcoming dividend is €0.21 a share, following on from the last 12 months, when the company distributed a total of €0.21 per share to shareholders. Based on the last year's worth of payments, Openjobmetis has a trailing yield of 3.8% on the current stock price of €5.54. If you buy this business for its dividend, you should have an idea of whether Openjobmetis's dividend is reliable and sustainable. So we need to investigate whether Openjobmetis can afford its dividend, and if the dividend could grow.
View our latest analysis for Openjobmetis
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 Openjobmetis paying out a modest 27% of its earnings. 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. The good news is it paid out just 21% of its free cash flow in the last year.
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. It's encouraging to see Openjobmetis has grown its earnings rapidly, up 34% a year for the past five years. Earnings per share have been growing very quickly, and the company is paying out a relatively low percentage of its profit and cash flow. Companies with growing earnings and low payout ratios are often the best long-term dividend stocks, as the company can both grow its earnings and increase the percentage of earnings that it pays out, essentially multiplying the dividend.
Unfortunately Openjobmetis has only been paying a dividend for a year or so, so there's not much of a history to draw insight from.
Final Takeaway
From a dividend perspective, should investors buy or avoid Openjobmetis? We love that Openjobmetis is growing earnings per share while simultaneously paying out a low percentage of both its earnings and cash flow. These characteristics suggest the company is reinvesting in growing its business, while the conservative payout ratio also implies a reduced risk of the dividend being cut in the future. Openjobmetis looks solid on this analysis overall, and we'd definitely consider investigating it more closely.
In light of that, while Openjobmetis has an appealing dividend, it's worth knowing the risks involved with this stock. In terms of investment risks, we've identified 3 warning signs with Openjobmetis and understanding them should be part of your investment process.
A common investment mistake is buying the first interesting stock you see. Here you can find a list of promising 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.
