Some investors rely on dividends for growing their wealth, and if you're one of those dividend sleuths, you might be intrigued to know that Logistri Fastighets AB (publ) (NGM:LOGIST) is about to go ex-dividend in just 3 days. The ex-dividend date is one business day before a company's record date, which is the date on which the company determines which shareholders are entitled to receive a dividend. The ex-dividend date is important as the process of settlement involves two full business days. So if you miss that date, you would not show up on the company's books on the record date. This means that investors who purchase Logistri Fastighets' shares on or after the 28th of December will not receive the dividend, which will be paid on the 4th of January.
The company's next dividend payment will be kr1.25 per share, and in the last 12 months, the company paid a total of kr5.00 per share. Based on the last year's worth of payments, Logistri Fastighets stock has a trailing yield of around 4.0% on the current share price of SEK123.5. 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! We need to see whether the dividend is covered by earnings and if it's growing. Logistics And Supply Chain Management
See our latest analysis for Logistri Fastighets
If a company pays out more in dividends than it earned, then the dividend might become unsustainable - hardly an ideal situation. Logistri Fastighets paid out 65% of its earnings to investors last year, a normal payout level for most businesses. A useful secondary check can be to evaluate whether Logistri Fastighets generated enough free cash flow to afford its dividend. Over the past year it paid out 115% of its free cash flow as dividends, which is uncomfortably high. It's hard to consistently pay out more cash than you generate without either borrowing or using company cash, so we'd wonder how the company justifies this payout level.
Logistri Fastighets paid out less in dividends than it reported in profits, but unfortunately it didn't generate enough cash to cover the dividend. Were this to happen repeatedly, this would be a risk to Logistri Fastighets's ability to maintain its dividend.
Click here to see how much of its profit Logistri Fastighets paid out over the last 12 months.
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. That's why it's comforting to see Logistri Fastighets's earnings have been skyrocketing, up 78% per annum for the past five years. Earnings have been growing quickly, but we're concerned dividend payments consumed most of the company's cash flow over the past year.
Another key way to measure a company's dividend prospects is by measuring its historical rate of dividend growth. Logistri Fastighets has seen its dividend decline 9.3% per annum on average over the past six years, which is not great to see. 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.
Is Logistri Fastighets an attractive dividend stock, or better left on the shelf? It's good to see that earnings per share are growing and that the company's payout ratio is within a normal range for most businesses. However we're somewhat concerned that it paid out 115% of its cashflow, which is uncomfortably high. In summary, it's hard to get excited about Logistri Fastighets from a dividend perspective.
With that being said, if dividends aren't your biggest concern with Logistri Fastighets, you should know about the other risks facing this business. To help with this, we've discovered 6 warning signs for Logistri Fastighets (1 makes us a bit uncomfortable!) that you ought to be aware of before buying the shares.
If you're in the market for strong dividend payers, we recommend checking our selection of top dividend stocks.
Find out whether Logistri Fastighets is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.
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Logistri Fastighets AB (publ), a specialized property company, owns, develops, and manages warehouses, logistics, and light industrial properties in Sweden and rest of the Nordic region.
Mediocre balance sheet unattractive dividend payer.
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