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DMG MORI AKTIENGESELLSCHAFT (ETR:GIL) is about to trade ex-dividend in the next 4 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 of consequence because whenever a stock is bought or sold, the trade takes at least two business day to settle. Accordingly, DMG MORI investors that purchase the stock on or after the 15th of May will not receive the dividend, which will be paid on the 17th of May.
The company's upcoming dividend is €1.03 a share, following on from the last 12 months, when the company distributed a total of €1.03 per share to shareholders. Calculating the last year's worth of payments shows that DMG MORI has a trailing yield of 2.4% on the current share price of €43.4. 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.
See our latest analysis for DMG MORI
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. DMG MORI paid out 65% of its earnings to investors last year, a normal payout level for most businesses.
Click here to see how much of its profit DMG MORI paid out over the last 12 months.
Have Earnings And Dividends Been Growing?
Stocks in companies that generate sustainable earnings growth often make the best dividend prospects, as it is easier to lift the dividend when earnings are rising. If earnings decline and the company is forced to cut its dividend, investors could watch the value of their investment go up in smoke. This is why it's a relief to see DMG MORI earnings per share are up 4.3% per annum over the last five years. Earnings growth has been slim and the company is paying out more than half of its earnings. While there is some room to both increase the payout ratio and reinvest in the business, generally the higher a payout ratio goes, the lower a company's prospects for future growth.
Many investors will assess a company's dividend performance by evaluating how much the dividend payments have changed over time. In the past 10 years, DMG MORI has increased its dividend at approximately 11% 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.