Just Three Days Till mySafety Group AB (STO:SAFETY B) Will Be Trading Ex-Dividend
Readers hoping to buy mySafety Group AB (STO:SAFETY B) for its dividend will need to make their move shortly, as the stock is about to trade ex-dividend. The ex-dividend date is usually set to be two business days 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. Thus, you can purchase mySafety Group's shares before the 7th of October in order to receive the dividend, which the company will pay on the 13th of October.
The company's upcoming dividend is kr00.45 a share, following on from the last 12 months, when the company distributed a total of kr1.35 per share to shareholders. Last year's total dividend payments show that mySafety Group has a trailing yield of 7.4% on the current share price of kr018.20. 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! So we need to check whether the dividend payments are covered, and if earnings are growing.
Dividends are usually paid out of company profits, so if a company pays out more than it earned then its dividend is usually at greater risk of being cut. mySafety Group paid out 103% of its earnings, which is more than we're comfortable with, unless there are mitigating circumstances.
Generally, the higher a company's payout ratio, the more the dividend is at risk of being reduced.
View our latest analysis for mySafety Group
Click here to see how much of its profit mySafety Group paid out over the last 12 months.
Have Earnings And Dividends Been Growing?
Stocks in companies that generate sustainable earnings growth often make the best dividend prospects, as it is easier to lift the dividend when earnings are rising. If earnings decline and the company is forced to cut its dividend, investors could watch the value of their investment go up in smoke. It's encouraging to see mySafety Group has grown its earnings rapidly, up 38% a year for the past five years.
Another key way to measure a company's dividend prospects is by measuring its historical rate of dividend growth. mySafety Group has delivered an average of 5.8% per year annual increase in its dividend, based on the past nine years of dividend payments. It's good to see both earnings and the dividend have improved - although the former has been rising much quicker than the latter, possibly due to the company reinvesting more of its profits in growth.
Final Takeaway
Has mySafety Group got what it takes to maintain its dividend payments? We're not enthused to see mySafety Group's dividend was not well covered by earnings over the last year, although it is great to see earnings growing. We're unconvinced on the company's merits, and think there might be better opportunities out there.
If you're not too concerned about mySafety Group's ability to pay dividends, you should still be mindful of some of the other risks that this business faces. For example, mySafety Group has 3 warning signs (and 1 which shouldn't be ignored) we think you should know about.
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.