Link Prop Investment AB (released) The stock (STO: LINKAB) is set to trade ex-dividend in three days. The ex-dividend date is generally set at one working day before the registration date which is the deadline by which you must be present in the books of the company as a shareholder to receive the dividend. It is important to know the ex-dividend date because any transaction in the share must have been settled by the registration date at the latest. This means that investors who buy shares of Link Prop Investment from October 8 will not receive the dividend, which will be paid on October 14.
The next dividend of the company will be 2.00 kr per share, compared to last year when the company paid a total of 8.00 kr to shareholders. Looking at the last 12 months of distributions, Link Prop Investment has a rolling yield of around 4.8% on its current price of SEK 167. Dividends are an important source of income for many shareholders, but the health of the business is crucial to sustaining these dividends. You have to see if the dividend is covered by profits and if it increases.
Check out our latest review for Link Prop Investment
Dividends are usually paid out of the company’s profits, so if a company pays more than it earned, its dividend is usually at risk of being reduced. Its dividend payout ratio is 84% of profits, which means the company pays out the majority of its profits. The relatively limited reinvestment of earnings could slow the rate of future earnings growth. We would be concerned about the risk of falling earnings. Having said that, even very profitable companies can sometimes not generate enough cash to pay the dividend, which is why we always need to check if the dividend is covered by the cash flow. Fortunately, she only paid 48% of her free cash flow in the past year.
It is positive to see that Link Prop Investment’s dividend is covered by both earnings and cash flow, as this is usually a sign that the dividend is sustainable, and a lower payout ratio usually suggests a higher. margin of safety before the dividend is cut.
Click here to see how much of its profits Link Prop Investment has paid in the past 12 months.
Have profits and dividends increased?
Companies with consistently increasing earnings per share usually make the best dividend-paying stocks because they generally find it easier to increase dividends per share. If profits fall enough, the company could be forced to cut its dividend. For this reason, we are pleased to see that Link Prop Investment’s earnings per share have grown 17% per year over the past five years. It has paid out more than three-quarters of its profits in the past year, even though earnings per share are growing rapidly. Higher earnings generally bode well for dividend growth, although with seemingly strong growth prospects, we wonder why management isn’t reinvesting more in the business.
Another key way to measure a company’s dividend outlook is to measure its historical rate of dividend growth. Since our data began six years ago, Link Prop Investment has increased its dividend by around 12% per year on average. Both earnings per share and dividends have been rising rapidly lately, which is great to see.
The bottom line
Does Link Prop Investment have what it takes to maintain its dividend payments? We like the growing earnings per share of Link Prop Investment and the fact that while its payout ratio is average, it has paid a lower percentage of its cash flow. Link Prop Investment looks solid overall on this analysis, and we would certainly consider taking a closer look.
So while Link Prop Investment looks good from a dividend standpoint, it’s still worth being aware of the risks involved in this title. Be aware that Link Prop Investment shows 5 warning signs in our investment analysis, and 1 of them is potentially serious …
If you are in the dividend-paying stock market, we recommend that you check out our list of the highest dividend-paying stocks with a yield above 2% and a future dividend.
This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts using only unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell shares and does not take into account your goals or your financial situation. Our aim is to bring you long-term, targeted analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price sensitive companies or qualitative material. Simply Wall St has no position in any of the stocks mentioned.
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