We Wouldn't Be Too Quick To Buy Trans Polonia S.A. (WSE:TRN) 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 Trans Polonia S.A. (WSE:TRN) is about to trade ex-dividend in the next 3 days. The ex-dividend date is two business days before a company's record date in most cases, which is the date on which the company determines which shareholders are entitled to receive a dividend. 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. Thus, you can purchase Trans Polonia's shares before the 13th of August in order to receive the dividend, which the company will pay on the 31st of August.
The company's next dividend payment will be zł0.21 per share, on the back of last year when the company paid a total of zł0.21 to shareholders. Last year's total dividend payments show that Trans Polonia has a trailing yield of 1.6% on the current share price of zł13.30. Dividends are a major contributor to investment returns for long term holders, but only if the dividend continues to be paid. 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. Trans Polonia lost money last year, so the fact that it's paying a dividend is certainly disconcerting. There might be a good reason for this, but we'd want to look into it further before getting comfortable.
See our latest analysis for Trans Polonia
Click here to see how much of its profit Trans Polonia paid out over the last 12 months.
Have Earnings And Dividends Been Growing?
When earnings decline, dividend companies become much harder to analyse and own safely. If business enters a downturn and the dividend is cut, the company could see its value fall precipitously. Trans Polonia reported a loss last year, and the general trend suggests its earnings have also been declining in recent years, making us wonder if the dividend is at risk.
The main way most investors will assess a company's dividend prospects is by checking the historical rate of dividend growth. Trans Polonia has delivered an average of 2.8% per year annual increase in its dividend, based on the past 10 years of dividend payments.
We update our analysis on Trans Polonia every 24 hours, so you can always get the latest insights on its financial health, here.
To Sum It Up
Is Trans Polonia worth buying for its dividend? These characteristics don't generally lead to outstanding dividend performance, and investors may not be happy with the results of owning this stock for its dividend.
Although, if you're still interested in Trans Polonia and want to know more, you'll find it very useful to know what risks this stock faces. Every company has risks, and we've spotted 4 warning signs for Trans Polonia (of which 3 don't sit too well with us!) you should know about.
If you're in the market for strong dividend payers, we recommend checking our selection of top 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.