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Is It Worth Considering Banque nationale de Belgique Société anonyme (EBR:BNB) For Its Upcoming Dividend?

Simply Wall St

Banque nationale de Belgique Société anonyme (EBR:BNB) stock is about to trade ex-dividend in 2 days time. Ex-dividend means that investors that purchase the stock on or after the 20th of May will not receive this dividend, which will be paid on the 22nd of May.

Banque nationale de Belgique Société anonyme's upcoming dividend is €85.80 a share, following on from the last 12 months, when the company distributed a total of €138 per share to shareholders. Calculating the last year's worth of payments shows that Banque nationale de Belgique Société anonyme has a trailing yield of 6.8% on the current share price of €2030. We love seeing companies pay a dividend, but it's also important to be sure that laying the golden eggs isn't going to kill our golden goose! So we need to check whether the dividend payments are covered, and if earnings are growing.

View our latest analysis for Banque nationale de Belgique Société anonyme

If a company pays out more in dividends than it earned, then the dividend might become unsustainable - hardly an ideal situation. Banque nationale de Belgique Société anonyme has a low and conservative payout ratio of just 7.4% of its income after tax.

When a company paid out less in dividends than it earned in profit, this generally suggests its dividend is affordable. The lower the % of its profit that it pays out, the greater the margin of safety for the dividend if the business enters a downturn.

Click here to see how much of its profit Banque nationale de Belgique Société anonyme paid out over the last 12 months.

ENXTBR:BNB Historical Dividend Yield May 16th 2020

Have Earnings And Dividends Been Growing?

Businesses with shrinking earnings are tricky from a dividend perspective. If business enters a downturn and the dividend is cut, the company could see its value fall precipitously. That's why it's vaguely disappointing to see earnings per share declined -4.7% on last year.

Another key way to measure a company's dividend prospects is by measuring its historical rate of dividend growth. In the past ten years, Banque nationale de Belgique Société anonyme has increased its dividend at approximately 0.9% a year on average.

To Sum It Up

Is Banque nationale de Belgique Société anonyme an attractive dividend stock, or better left on the shelf? Banque nationale de Belgique Société anonyme's earnings per share have declined over the past 12 months, although we note that it is paying out a low fraction of its earnings. Ordinarily we wouldn't be too concerned about a one-year decline, especially given the payout ratio is low. This makes us wonder if the company is incurring costs by reinvesting in its business. From a dividend perspective we struggle to see value in a company with declining earnings per share, but it's also true that a one-year decline often doesn't mean much. So we wouldn't be too quick to write this one off. We think there are likely better opportunities out there.

So if you want to do more digging on Banque nationale de Belgique Société anonyme, you'll find it worthwhile knowing the risks that this stock faces. Every company has risks, and we've spotted 1 warning sign for Banque nationale de Belgique Société anonyme you should know about.

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.