Don’t rush to buy Klassik Radio AG (ETR: KA8) just because it goes ex-dividend

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Klassik Radio AG (ETR:KA8) the stock is set to trade ex-dividend in 3 days. Typically, the ex-dividend date is one business day before the record date which is the date a company determines which shareholders are eligible to receive a dividend. It is important to know the ex-dividend date, because any trade in the stock must have settled by the record date. As a result, Klassik Radio investors who buy the stock on or after June 15 will not receive the dividend, which will be paid on June 20.

The company’s next dividend payment will be €0.21 per share. Last year, in total, the company distributed €0.21 to shareholders. Based on last year’s payouts, Klassik Radio has a rolling yield of 3.9% on the current share price of €5.4. If you’re buying this company for its dividend, you should get an idea of ​​the reliability and sustainability of Klassik Radio’s dividend. We need to see if the dividend is covered by earnings and if it increases.

See our latest review for Klassik Radio

Dividends are usually paid out of company profits. If a company pays out more dividends than it earns in profits, then the dividend could be unsustainable. Klassik Radio posted a loss last year, so it’s not nice to see that it has continued to pay out a dividend.

Click here to see how much Klassik Radio has paid out over the past 12 months.

XTRA:KA8 Historic dividend June 11, 2022

Have earnings and dividends increased?

Companies with declining profits are riskier for dividend shareholders. If business goes into a recession and the dividend is cut, the company could see its value drop precipitously. Klassik Radio was not profitable last year and unfortunately the general trend suggests that its profits have been declining over the past five years, which makes us wonder if the dividend is sustainable.

Another key way to gauge a company’s dividend outlook is to measure its historical rate of dividend growth. Klassik Radio has achieved an average annual increase of 7.7% per year in its dividend, based on the last 10 years of dividend payments.

We update our analysis on Klassik Radio every 24 hours, so you can always get the latest information on its financial health here.

The essential

Is Klassik Radio an attractive dividend stock, or is it better left on the shelf? It’s not an attractive combination from a dividend perspective, and we’re inclined to drop this one for now.

That being said, if you still consider Klassik Radio as an investment, you will find it useful to know what risks this title faces. Example: we have identified 3 warning signs for Klassik Radio you should be aware.

If you are looking for strong dividend payers, we recommend by consulting our selection of the best dividend-paying stocks.

This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts only using unbiased methodology and our articles are not intended to be financial advice. It is not a recommendation to buy or sell stocks and does not take into account your objectives or financial situation. Our goal is to bring you targeted long-term analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price-sensitive companies or qualitative materials. Simply Wall St has no position in the stocks mentioned.

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