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Read This Before Considering Bossard Holding AG (VTX:BOSN) For Its Upcoming CHF2.00 Dividend

It looks like Bossard Holding AG (VTX:BOSN) is about to go ex-dividend in the next 4 days. This means that investors who purchase shares on or after the 14th of April will not receive the dividend, which will be paid on the 16th of April.

Bossard Holding's next dividend payment will be CHF2.00 per share, and in the last 12 months, the company paid a total of CHF4.00 per share. Last year's total dividend payments show that Bossard Holding has a trailing yield of 3.3% on the current share price of CHF119.8. If you buy this business for its dividend, you should have an idea of whether Bossard Holding'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 Bossard Holding

If a company pays out more in dividends than it earned, then the dividend might become unsustainable - hardly an ideal situation. That's why it's good to see Bossard Holding paying out a modest 41% of its earnings. A useful secondary check can be to evaluate whether Bossard Holding generated enough free cash flow to afford its dividend. It paid out more than half (69%) of its free cash flow in the past year, which is within an average range for most companies.

It's positive to see that Bossard Holding's dividend is covered by both profits and cash flow, since this is generally a sign that the dividend is sustainable, and a lower payout ratio usually suggests a greater margin of safety before the dividend gets cut.

Click here to see the company's payout ratio, plus analyst estimates of its future dividends.

SWX:BOSN Historical Dividend Yield April 9th 2020
SWX:BOSN Historical Dividend Yield April 9th 2020

Have Earnings And Dividends Been Growing?

Businesses with strong growth prospects usually make the best dividend payers, because it's easier to grow dividends when earnings per share are improving. If earnings decline and the company is forced to cut its dividend, investors could watch the value of their investment go up in smoke. With that in mind, we're encouraged by the steady growth at Bossard Holding, with earnings per share up 5.4% on average over the last five years. While earnings have been growing at a credible rate, the company is paying out a majority of its earnings to shareholders. If management lifts the payout ratio further, we'd take this as a tacit signal that the company's growth prospects are slowing.

Many investors will assess a company's dividend performance by evaluating how much the dividend payments have changed over time. In the last ten years, Bossard Holding has lifted its dividend by approximately 18% a year on average. It's encouraging to see the company lifting dividends while earnings are growing, suggesting at least some corporate interest in rewarding shareholders.

Final Takeaway

Is Bossard Holding an attractive dividend stock, or better left on the shelf? Earnings per share have been growing at a steady rate, and Bossard Holding paid out less than half its profits and more than half its free cash flow as dividends over the last year. In summary, while it has some positive characteristics, we're not inclined to race out and buy Bossard Holding today.

So while Bossard Holding looks good from a dividend perspective, it's always worthwhile being up to date with the risks involved in this stock. For example, we've found 3 warning signs for Bossard Holding (1 is significant!) that deserve your attention before investing in the shares.

We wouldn't recommend just buying the first dividend stock you see, though. Here's a list of interesting dividend stocks with a greater than 2% yield and an upcoming dividend.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.

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