Yahoo Finance Should You Buy SOL S.p.A. (BIT:SOL) For Its Upcoming Dividend In 2 Days?
Regular readers will know that we love our dividends at Simply Wall St, which is why it's exciting to see SOL S.p.A. (BIT:SOL) is about to trade ex-dividend in the next 2 days. You will need to purchase shares before the 25th of May to receive the dividend, which will be paid on the 27th of May.
SOL's next dividend payment will be €0.17 per share, and in the last 12 months, the company paid a total of €0.17 per share. Based on the last year's worth of payments, SOL stock has a trailing yield of around 1.8% on the current share price of €9.7. Dividends are an important source of income to many shareholders, but the health of the business is crucial to maintaining those dividends. We need to see whether the dividend is covered by earnings and if it's growing.
View our latest analysis for SOL
Dividends are typically paid out of company income, so if a company pays out more than it earned, its dividend is usually at a higher risk of being cut. Fortunately SOL's payout ratio is modest, at just 32% of profit.
Click here to see how much of its profit SOL 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 decline and the company is forced to cut its dividend, investors could watch the value of their investment go up in smoke. For this reason, we're glad to see SOL's earnings per share have risen 11% per annum over the last five years.
The main way most investors will assess a company's dividend prospects is by checking the historical rate of dividend growth. In the past ten years, SOL has increased its dividend at approximately 7.6% a year on average. We're glad to see dividends rising alongside earnings over a number of years, which may be a sign the company intends to share the growth with shareholders.
The Bottom Line
Should investors buy SOL for the upcoming dividend? Typically, companies that are growing rapidly and paying out a low fraction of earnings are keeping the profits for reinvestment in the business. This is one of the most attractive investment combinations under this analysis, as it can create substantial value for investors over the long run. In summary, SOL appears to have some promise as a dividend stock, and we'd suggest taking a closer look at it.
So while SOL looks good from a dividend perspective, it's always worthwhile being up to date with the risks involved in this stock. Case in point: We've spotted 1 warning sign for SOL you should be aware of.
We wouldn't recommend just buying the first dividend stock you see, though. Here's a list of interesting dividend stocks with a greater than 2% yield and an upcoming dividend.
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This article by Simply Wall St is general in nature. 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. Thank you for reading.
