Do These 3 Checks Before Buying FORTEC Elektronik AG (ETR:FEV) For Its Upcoming Dividend

As an investor considering FORTEC Elektronik AG (ETR:FEV) for its upcoming dividend, it is essential to perform a thorough analysis before making a decision. This article will guide you through three crucial checks to help you evaluate the company's dividend sustainability and growth potential.

1. Dividend Yield and Payout Ratio

The first step in evaluating FORTEC's dividend is to examine its dividend yield and payout ratio. The dividend yield is calculated by dividing the annual dividend payment by the prevailing share price. FORTEC's dividend yield is 2.3%, which is relatively stable and indicates a sustainable dividend policy. However, it is important to compare this yield with the company's historical averages and industry peers to ensure it remains competitive.

The dividend payout ratio is the proportion of earnings paid out as dividends. A lower payout ratio indicates that the company is retaining more earnings for reinvestment, which can support future dividend growth. FORTEC's dividend payout ratio is 50%, which is higher than the industry average. This suggests that the company is distributing a larger proportion of its earnings as dividends, which may limit its ability to reinvest in the business and grow earnings.

2. Dividend Cover and Earnings Growth

The second check is to analyze FORTEC's dividend cover and earnings growth. Dividend cover is a measure of how many times the dividend is covered by company income. A cover of 1 means all income is paid out in dividends. FORTEC has a dividend cover of 1.5, which indicates that the company's income is sufficient to pay the current dividend. However, this cover is lower than the industry average, suggesting that FORTEC's dividends are less well-covered by earnings compared to its peers.

Earnings growth is crucial for supporting dividend growth. FORTEC's earnings growth rate can be analyzed by comparing the company's earnings per share (EPS) over time. The provided information does not include EPS data, but investors should look for a consistent upward trend in earnings to support dividend growth.



3. Financial Health and Risks

The final check is to assess FORTEC's financial health and risks. A strong balance sheet, robust cash flow, and a solid track record of earnings growth are essential for maintaining and increasing dividend payments. Investors should analyze FORTEC's debt-to-equity ratio, return on equity, and free cash flow to evaluate its financial health.

Additionally, investors should consider the risks and challenges facing FORTEC, such as market conditions, supply chain disruptions, regulatory and compliance risks, currency fluctuations, competition, and dependence on key customers. These factors can impact FORTEC's ability to maintain or increase its dividend payments in the future.



In conclusion, investors should perform these three checks before buying FORTEC Elektronik AG (ETR:FEV) for its upcoming dividend. By analyzing the company's dividend yield, payout ratio, dividend cover, earnings growth, financial health, and risks, investors can make an informed decision about the company's dividend sustainability and growth potential.