Kino Polska TV Spolka Akcyjna (WSE:KPL) Looks Like A Good Stock, And It's Going Ex-Dividend Soon
Kino Polska TV Spolka Akcyjna (WSE:KPL) is about to trade ex-dividend in the next 3 days. Typically, the ex-dividend date is two business days before the record date, which is the date on which a company determines the shareholders eligible to receive a dividend. The ex-dividend date is an important date to be aware of as any purchase of the stock made on or after this date might mean a late settlement that doesn't show on the record date. Therefore, if you purchase Kino Polska TV Spolka Akcyjna's shares on or after the 20th of August, you won't be eligible to receive the dividend, when it is paid on the 28th of August.
The company's next dividend payment will be zł1.18 per share. Last year, in total, the company distributed zł0.63 to shareholders. Last year's total dividend payments show that Kino Polska TV Spolka Akcyjna has a trailing yield of 3.2% on the current share price of zł19.50. Dividends are an important source of income to many shareholders, but the health of the business is crucial to maintaining those dividends. As a result, readers should always check whether Kino Polska TV Spolka Akcyjna has been able to grow its dividends, or if the dividend might be cut.
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. Kino Polska TV Spolka Akcyjna paid out just 17% of its profit last year, which we think is conservatively low and leaves plenty of margin for unexpected circumstances. Yet cash flows are even more important than profits for assessing a dividend, so we need to see if the company generated enough cash to pay its distribution. Luckily it paid out just 15% of its free cash flow last year.
It's positive to see that Kino Polska TV Spolka Akcyjna'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.
View our latest analysis for Kino Polska TV Spolka Akcyjna
Click here to see how much of its profit Kino Polska TV Spolka Akcyjna paid out over the last 12 months.
Have Earnings And Dividends Been Growing?
Businesses with strong growth prospects usually make the best dividend payers, because it's easier to grow dividends when earnings per share are improving. If earnings fall far enough, the company could be forced to cut its dividend. It's encouraging to see Kino Polska TV Spolka Akcyjna has grown its earnings rapidly, up 24% a year for the past five years. Kino Polska TV Spolka Akcyjna looks like a real growth company, with earnings per share growing at a cracking pace and the company reinvesting most of its profits in the business.
Another key way to measure a company's dividend prospects is by measuring its historical rate of dividend growth. Kino Polska TV Spolka Akcyjna's dividend payments per share have declined at 4.5% per year on average over the past 10 years, which is uninspiring. It's unusual to see earnings per share increasing at the same time as dividends per share have been in decline. We'd hope it's because the company is reinvesting heavily in its business, but it could also suggest business is lumpy.
To Sum It Up
Is Kino Polska TV Spolka Akcyjna worth buying for its dividend? Kino Polska TV Spolka Akcyjna has grown its earnings per share while simultaneously reinvesting in the business. Unfortunately it's cut the dividend at least once in the past 10 years, but the conservative payout ratio makes the current dividend look sustainable. Overall we think this is an attractive combination and worthy of further research.
With that in mind, a critical part of thorough stock research is being aware of any risks that stock currently faces. For example - Kino Polska TV Spolka Akcyjna has 1 warning sign we think you should be aware of.
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.