Yahoo Finance Be Sure To Check Out IVU Traffic Technologies AG (ETR:IVU) Before It Goes Ex-Dividend
Regular readers will know that we love our dividends at Simply Wall St, which is why it's exciting to see IVU Traffic Technologies AG (ETR:IVU) is about to trade ex-dividend in the next 3 days. The ex-dividend date is one business day before the record date, which is the cut-off date for shareholders to be present on the company's books to be eligible for a dividend payment. The ex-dividend date is important because any transaction on a stock needs to have been settled before the record date in order to be eligible for a dividend. This means that investors who purchase IVU Traffic Technologies' shares on or after the 30th of May will not receive the dividend, which will be paid on the 3rd of June.
The company's upcoming dividend is €0.26 a share, following on from the last 12 months, when the company distributed a total of €0.26 per share to shareholders. Last year's total dividend payments show that IVU Traffic Technologies has a trailing yield of 1.8% on the current share price of €14.15. We love seeing companies pay a dividend, but it's also important to be sure that laying the golden eggs isn't going to kill our golden goose! We need to see whether the dividend is covered by earnings and if it's growing.
View our latest analysis for IVU Traffic Technologies
If a company pays out more in dividends than it earned, then the dividend might become unsustainable - hardly an ideal situation. IVU Traffic Technologies paid out a comfortable 40% of its profit last year. A useful secondary check can be to evaluate whether IVU Traffic Technologies generated enough free cash flow to afford its dividend. Fortunately, it paid out only 42% of its free cash flow in the past year.
It's positive to see that IVU Traffic Technologies's dividend is covered by both profits and cash flow, since this is generally a sign that the dividend is sustainable, and a lower payout ratio usually suggests a greater margin of safety before the dividend gets cut.
Click here to see how much of its profit IVU Traffic Technologies 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 fall far enough, the company could be forced to cut its dividend. For this reason, we're glad to see IVU Traffic Technologies's earnings per share have risen 14% per annum over the last five years. The company has managed to grow earnings at a rapid rate, while reinvesting most of the profits within the business. This will make it easier to fund future growth efforts and we think this is an attractive combination - plus the dividend can always be increased later.
Many investors will assess a company's dividend performance by evaluating how much the dividend payments have changed over time. IVU Traffic Technologies has delivered an average of 20% per year annual increase in its dividend, based on the past nine years of dividend payments. It's exciting to see that both earnings and dividends per share have grown rapidly over the past few years.
To Sum It Up
Has IVU Traffic Technologies got what it takes to maintain its dividend payments? IVU Traffic Technologies has grown its earnings per share while simultaneously reinvesting in the business. Unfortunately it's cut the dividend at least once in the past nine years, but the conservative payout ratio makes the current dividend look sustainable. There's a lot to like about IVU Traffic Technologies, and we would prioritise taking a closer look at it.
In light of that, while IVU Traffic Technologies has an appealing dividend, it's worth knowing the risks involved with this stock. For example - IVU Traffic Technologies has 1 warning sign we think you should be aware of.
A common investing mistake is buying the first interesting stock you see. Here you can find a full list of high-yield dividend stocks.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.
