Regular readers will know we love our dividends at Simply Wall St, which is why it’s exciting to see Services, Investments, Management and Development Company (EBR: SPA) is set to trade ex-dividend within the next four days. Typically, the ex-dividend date is one business day prior to the record date which is the date a company determines which shareholders are eligible to receive a dividend. The ex-dividend date is an important date to know, as any purchase of shares made on or after that date may mean a late settlement that does not appear on the record date. This means that you will have to buy shares of the Société de Services de Participations de Direction et d’Elaboration before June 23 to receive the dividend, which will be paid on June 25.

The future dividend of the company is € 1.40 per share, following the last 12 months, when the company has distributed a total of € 2.00 per share to shareholders. The calculation of the value of payments from last year shows that the Société de Services de Participations de Direction et d’Elaboration has a rolling return of 1.1% on the current share price of 189 €. We love to see companies pay a dividend, but it’s also important to make sure that laying the golden eggs is not going to kill our goose that lays the golden eggs! Accordingly, readers should always check whether the Société de Services de Participations de Direction et d’Elaboration has been able to increase its dividends, or if the dividend could be reduced.

See our latest analysis for Management and Development Participations Services Company

If a company pays more dividends than it has earned, then the dividend could become unsustainable – which is not an ideal situation. This is why it is good to see the Société de Services de Participations de Direction et d’Elaboration pay a modest 30% of its profits. A useful secondary check may be to assess whether the Management and Development Services Company has generated sufficient free cash flow to pay its dividend. Fortunately, his dividend payments only took 29% of the free cash flow he generated, which is a comfortable payout ratio.

It is positive to see that the dividend of the Société de Services de Participations de Direction et d’Elaboration is covered by both earnings and cash flow, as this is usually a sign that the dividend is sustainable, and a Lower distribution rate generally suggests a greater margin of safety. before the dividend is cut.

Click here to see how much of its profits the Management and Development Services Company paid out over the past 12 months.

Have profits and dividends increased?

Companies with strong growth prospects generally make the best dividend payers because dividends are easier to grow when earnings per share improve. Investors love dividends, so if profits fall and the dividend is reduced, expect a stock to be sold massively at the same time. This is why it is a relief to see the earnings per share of the Management and Development Services Company increasing 5.4% per year over the past five years. Management reinvested more than half of the company’s profits back into the business, and the company was able to increase its profits with this retained capital. Organizations that reinvest heavily in themselves typically get stronger over time, which can bring compelling benefits like higher profits and dividends.

Many investors will assess a company’s dividend yield by evaluating how much dividend payments have changed over time. The Société de Services de Participations de Direction et d’Elaboration has recorded dividend growth of 7.2% per year on average over the past 10 years. It is encouraging to see the company raising its dividends as profits rise, suggesting at least some corporate interest in rewarding shareholders.

Last takeaways

Should investors buy the Société de Services de Participations de Direction et d’Elaboration for the next dividend? Earnings per share increased moderately and the Société de Services de Participations de Direction et d’Elaboration is paying less than half of its profits and cash flow as dividends, which is an interesting combination because it suggests that the company invests in growth. It might be nice to see profits grow faster, but the Management and Development Services Company is careful with its dividend distributions and could still perform reasonably well over the long term. Overall, we think this is an attractive combination worthy of further research.

Would you like to know more about the dividend performance of the Société de Services de Participations de Direction et d’Elaboration? Check out this visualization of its historic revenue and profit growth.

However, we don’t recommend simply buying the first dividend stock you see. Here is a list of interesting dividend paying stocks with a yield above 2% and a dividend coming soon.

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This Simply Wall St article is general in nature. 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 the mentioned stocks.
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