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 HOCHTIEF Aktiengesellschaft (ETR:HOT) is about to go ex-dividend in just three days. Typically, the ex-dividend date is two business days before the record date, which is the date on which a company determines the shareholders eligible to receive a dividend. The ex-dividend date is important because any transaction on a stock needs to have been settled before the record date in order to be eligible for a dividend. Therefore, if you purchase HOCHTIEF’s shares on or after the 30th of April, you won’t be eligible to receive the dividend, when it is paid on the 7th of July.
The company’s upcoming dividend is €6.60 a share, following on from the last 12 months, when the company distributed a total of €6.60 per share to shareholders. Based on the last year’s worth of payments, HOCHTIEF stock has a trailing yield of around 1.4% on the current share price of €459.00. If you buy this business for its dividend, you should have an idea of whether HOCHTIEF’s dividend is reliable and sustainable. So we need to check whether the dividend payments are covered, and if earnings are growing.
If a company pays out more in dividends than it earned, then the dividend might become unsustainable – hardly an ideal situation. HOCHTIEF is paying out an acceptable 55% of its profit, a common payout level among most companies. That said, even highly profitable companies sometimes might not generate enough cash to pay the dividend, which is why we should always check if the dividend is covered by cash flow. The good news is it paid out just 24% of its free cash flow in the last year.
It’s positive to see that HOCHTIEF’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.
Check out our latest analysis for HOCHTIEF
Click here to see the company’s payout ratio, plus analyst estimates of its future dividends.
XTRA:HOT Historic Dividend April 26th 2026 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. Fortunately for readers, HOCHTIEF’s earnings per share have been growing at 16% a year for the past five years. HOCHTIEF is paying out a bit over half its earnings, which suggests the company is striking a balance between reinvesting in growth, and paying dividends. Given the quick rate of earnings per share growth and current level of payout, there may be a chance of further dividend increases in the future.
Another key way to measure a company’s dividend prospects is by measuring its historical rate of dividend growth. Since the start of our data, 10 years ago, HOCHTIEF has lifted its dividend by approximately 13% a year on average. It’s exciting to see that both earnings and dividends per share have grown rapidly over the past few years.
To Sum It Up
Is HOCHTIEF worth buying for its dividend? We like HOCHTIEF’s growing earnings per share and the fact that – while its payout ratio is around average – it paid out a lower percentage of its cash flow. HOCHTIEF looks solid on this analysis overall, and we’d definitely consider investigating it more closely.
In light of that, while HOCHTIEF has an appealing dividend, it’s worth knowing the risks involved with this stock. In terms of investment risks, we’ve identified 1 warning sign with HOCHTIEF and understanding them should be part of your investment process.
A common investing mistake is buying the first interesting stock you see. Here you can find a full list of high-yield dividend stocks.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.