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 Talenom Oyj (HEL:TNOM) is about to go ex-dividend in just 4 days. This means that investors who purchase shares on or after the 26th of February will not receive the dividend, which will be paid on the 5th of March.
Talenom Oyj's next dividend payment will be €0.75 per share, on the back of last year when the company paid a total of €0.75 to shareholders. Looking at the last 12 months of distributions, Talenom Oyj has a trailing yield of approximately 1.8% on its current stock price of €41. Dividends are a major contributor to investment returns for long term holders, but only if the dividend continues to be paid. As a result, readers should always check whether Talenom Oyj has been able to grow its dividends, or if the dividend might be cut.
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. Talenom Oyj is paying out an acceptable 68% of its profit, a common payout level among most companies.
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 fall far enough, the company could be forced to cut its dividend. That's why it's comforting to see Talenom Oyj's earnings have been skyrocketing, up 56% per annum for the past five years. The current payout ratio suggests a good balance between rewarding shareholders with dividends, and reinvesting in growth. With a reasonable payout ratio, profits being reinvested, and some earnings growth, Talenom Oyj could have strong prospects for future increases to the dividend.
Given that Talenom Oyj has only been paying a dividend for a year, there's not much of a past history to draw insight from.
The Bottom Line
Has Talenom Oyj got what it takes to maintain its dividend payments? Earnings per share are growing at an attractive rate, and Talenom Oyj is paying out a bit over half its profits. We think this is a pretty attractive combination, and would be interested in investigating Talenom Oyj more closely.
Wondering what the future holds for Talenom Oyj? See what the three analysts we track are forecasting, with this visualisation of its historical and future estimated earnings and cash flow
A common investment mistake is buying the first interesting stock you see. Here you can find a list of promising 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 firstname.lastname@example.org. 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.
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