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 Weng Fine Art AG (FRA:WFA) is about to go ex-dividend in just three days. Typically, the ex-dividend date is one business day 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. Thus, you can purchase Weng Fine Art’s shares before the 19th of December in order to receive the dividend, which the company will pay on the 27th of December.
The company’s next dividend payment will be €0.05 per share. Last year, in total, the company distributed €0.05 to shareholders. Looking at the last 12 months of distributions, Weng Fine Art has a trailing yield of approximately 1.2% on its current stock price of €4.34. If you buy this business for its dividend, you should have an idea of whether Weng Fine Art’s dividend is reliable and sustainable. We need to see whether the dividend is covered by earnings and if it’s growing.
See our latest analysis for Weng Fine Art
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. Weng Fine Art reported a loss after tax last year, which means it’s paying a dividend despite being unprofitable. While this might be a one-off event, this is unlikely to be sustainable in the long term.
Click here to see how much of its profit Weng Fine Art paid out over the last 12 months.
Companies with falling earnings are riskier for dividend shareholders. Investors love dividends, so if earnings fall and the dividend is reduced, expect a stock to be sold off heavily at the same time. Weng Fine Art was unprofitable last year and, unfortunately, the general trend suggests its earnings have been in decline over the last five years, making us wonder if the dividend is sustainable at all.
Another key way to measure a company’s dividend prospects is by measuring its historical rate of dividend growth. Weng Fine Art’s dividend payments per share have declined at 3.0% per year on average over the past six years, which is uninspiring. It’s never nice to see earnings and dividends falling, but at least management has cut the dividend rather than potentially risk the company’s health in an attempt to maintain it.