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 Jungfraubahn Holding AG (VTX:JFN) is about to go ex-dividend in just 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, Jungfraubahn Holding investors that purchase the stock on or after the 17th of May will not receive the dividend, which will be paid on the 22nd of May.
The company's upcoming dividend is CHF3.60 a share, following on from the last 12 months, when the company distributed a total of CHF3.60 per share to shareholders. Calculating the last year's worth of payments shows that Jungfraubahn Holding has a trailing yield of 2.3% on the current share price of CHF155.2. 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.
View our latest analysis for Jungfraubahn Holding
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. That's why it's good to see Jungfraubahn Holding paying out a modest 48% of its earnings.
Click here to see how much of its profit Jungfraubahn Holding paid out over the last 12 months.
Have Earnings And Dividends Been Growing?
Companies that aren't growing their earnings can still be valuable, but it is even more important to assess the sustainability of the dividend if it looks like the company will struggle to grow. If earnings fall far enough, the company could be forced to cut its dividend. That explains why we're not overly excited about Jungfraubahn Holding's flat earnings over the past five years. It's better than seeing them drop, certainly, but over the long term, all of the best dividend stocks are able to meaningfully grow their earnings per share. Earnings per share growth in recent times has not been a standout. However, companies that see their growth slow can often choose to pay out a greater percentage of earnings to shareholders, which could see the dividend continue to rise.
The main way most investors will assess a company's dividend prospects is by checking the historical rate of dividend growth. Since the start of our data, 10 years ago, Jungfraubahn Holding has lifted its dividend by approximately 7.2% a year on average.