Titanium Oyj (HEL:TITAN) Stock Goes Ex-Dividend In Just 3 Days

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 Titanium Oyj (HEL:TITAN) is about to go ex-dividend in just 3 days. If you purchase the stock on or after the 3rd of April, you won't be eligible to receive this dividend, when it is paid on the 15th of April.

Titanium Oyj's next dividend payment will be €0.72 per share, and in the last 12 months, the company paid a total of €0.72 per share. Looking at the last 12 months of distributions, Titanium Oyj has a trailing yield of approximately 8.5% on its current stock price of €8.48. 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 Titanium Oyj

If a company pays out more in dividends than it earned, then the dividend might become unsustainable - hardly an ideal situation. Titanium Oyj distributed an unsustainably high 112% of its profit as dividends to shareholders last year. Without extenuating circumstances, we'd consider the dividend at risk of a cut.

Generally, the higher a company's payout ratio, the more the dividend is at risk of being reduced.

Click here to see how much of its profit Titanium Oyj paid out over the last 12 months.

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. Investors love dividends, so if earnings fall and the dividend is reduced, expect a stock to be sold off heavily at the same time. It's encouraging to see Titanium Oyj has grown its earnings rapidly, up 42% a year for the past five years.

Many investors will assess a company's dividend performance by evaluating how much the dividend payments have changed over time. In the last two years, Titanium Oyj has lifted its dividend by approximately 106% a year on average. It's great to see earnings per share growing rapidly over several years, and dividends per share growing right along with it.

To Sum It Up

Is Titanium Oyj worth buying for its dividend? We're not enthused to see Titanium Oyj's dividend was not well covered by earnings over the last year, although it is great to see earnings growing. We think there are likely better opportunities out there.

If you're not too concerned about Titanium Oyj's ability to pay dividends, you should still be mindful of some of the other risks that this business faces. In terms of investment risks, we've identified 4 warning signs with Titanium Oyj and understanding them should be part of your investment process.

If you're in the market for dividend stocks, we recommend checking our list of top 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.