It looks like (WSE:GPP) is about to go ex-dividend in the next 4 days. The ex-dividend date generally occurs two days before the record date, which is the day on which shareholders need to be on the company's books in order to receive a dividend. The ex-dividend date is important as the process of settlement involves at least two full business days. So if you miss that date, you would not show up on the company's books on the record date. Therefore, if you purchase Grupa Pracuj's shares on or after the 20th of June, you won't be eligible to receive the dividend, when it is paid on the 2nd of July.

The company's next dividend payment will be zł2.10 per share. Last year, in total, the company distributed zł2.10 to shareholders. Last year's total dividend payments show that Grupa Pracuj has a trailing yield of 3.4% on the current share price of zł61.60. If you buy this business for its dividend, you should have an idea of whether Grupa Pracuj's dividend is reliable and sustainable. That's why we should always check whether the dividend payments appear sustainable, and if the company is growing.

We've found 21 US stocks that are forecast to pay a dividend yield of over 6% next year. See the full list for free.

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. Grupa Pracuj is paying out an acceptable 68% of its profit, a common payout level among most companies. A useful secondary check can be to evaluate whether Grupa Pracuj generated enough free cash flow to afford its dividend. Over the last year it paid out 54% of its free cash flow as dividends, within the usual range for most companies.

It's encouraging to see that the dividend is covered by both profit and cash flow. This generally suggests the dividend is sustainable, as long as earnings don't drop precipitously.

Check out our latest analysis for Grupa Pracuj

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

Stocks in companies that generate sustainable earnings growth often make the best dividend prospects, as it is easier to lift the dividend when earnings are rising. If earnings decline and the company is forced to cut its dividend, investors could watch the value of their investment go up in smoke. For this reason, we're glad to see Grupa Pracuj's earnings per share have risen 14% per annum over the last five years. Grupa Pracuj 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.

The main way most investors will assess a company's dividend prospects is by checking the historical rate of dividend growth. Since the start of our data, three years ago, Grupa Pracuj has lifted its dividend by approximately 1.6% a year on average. Earnings per share have been growing much quicker than dividends, potentially because Grupa Pracuj is keeping back more of its profits to grow the business.

Has Grupa Pracuj got what it takes to maintain its dividend payments? Higher earnings per share generally lead to higher dividends from dividend-paying stocks over the long run. However, we'd also note that Grupa Pracuj is paying out more than half of its earnings and cash flow as profits, which could limit the dividend growth if earnings growth slows. Overall, it's not a bad combination, but we feel that there are likely more attractive dividend prospects out there.

In light of that, while Grupa Pracuj has an appealing dividend, it's worth knowing the risks involved with this stock. For example - Grupa Pracuj has we think you should be aware of.

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