Befesa Pays €1.25 Dividend
Befesa S.A. will give shareholders a dividend of €1.25/share on June 20th. With this payment, the dividend yield will rise to 3.2%. This is good news for shareholders.
Check out our latest review of Befesa. We've analyzed their recent performance. We've explored their financial data. We've considered their growth potential. Read on to see our findings.
Befesa's Profits Easily Cover Distributions
Low dividends can still be good if they are regular. Befesa earned enough to pay their last dividend. However, the dividend payout is 417% of their cash flow. They might prioritize paying shareholders over growing the business. This high payout ratio could lead to a dividend cut if the company faced problems.
The earnings per share will go up by 42% in the next year. The dividend rate is likely to remain the same as before. We expect that the payout ratio will be 40%, which is good for the dividend to last.
Befesa's Dividends: Inconsistent
Befesa's dividend is not always stable. We are worried about the dividend over time. In 2018, the payment was €0.73, and now it's €1.25. This means the company's yearly rate grew by 11%. But sometimes, the payments drop, so we are careful.
Limited Growth For Dividend Potential
We should see if earnings are increasing for better dividends in the future since the dividend was cut before. Befesa's earnings per share decreased by 11% a year for the last five years. This is not good for the dividends. Even if there is a conservative payout ratio, it may decrease if the earnings drop significantly. However, the forecast suggests that earnings will rise in the coming year. We can't be too sure until there is a consistent pattern.
Is Befesa's Dividend Sustainable?
In summary, we don't recommend buying this company for its dividend. The dividend stayed the same this year, but Befesa's cash flow is not enough to support it. If you want to invest in stocks for income, we suggest looking elsewhere and avoiding this one.
The stock market shows how important it is for companies to have a reliable dividend policy. However, investors should also look at other factors when examining a company. Befesa has 4 warning signs and 1 slightly bad sign that investors should be aware of. For more companies with high dividend payouts, check out our list of strong dividend payers.
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