PATRIZIA SE (ETR:PAT) is about to trade ex-dividend in the next 3 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 of consequence because whenever a stock is bought or sold, the trade can take two business days or more to settle. This means that investors who purchase PATRIZIA’s shares on or after the 11th of June will not receive the dividend, which will be paid on the 15th of June.
The company’s upcoming dividend is €0.36 a share, following on from the last 12 months, when the company distributed a total of €0.36 per share to shareholders. Last year’s total dividend payments show that PATRIZIA has a trailing yield of 4.8% on the current share price of €7.45. 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 investigate whether PATRIZIA can afford its dividend, and if the dividend could grow.
Dividends are typically paid from company earnings. If a company pays more in dividends than it earned in profit, then the dividend could be unsustainable. PATRIZIA paid out 173% of profit in the past year, which we think is typically not sustainable unless there are mitigating characteristics such as unusually strong cash flow or a large cash balance. Yet cash flows are even more important than profits for assessing a dividend, so we need to see if the company generated enough cash to pay its distribution. It paid out more than half (53%) of its free cash flow in the past year, which is within an average range for most companies.
It’s good to see that while PATRIZIA’s dividends were not covered by profits, at least they are affordable from a cash perspective. If executives were to continue paying more in dividends than the company reported in profits, we’d view this as a warning sign. Extraordinarily few companies are capable of persistently paying a dividend that is greater than their profits.
See our latest analysis for PATRIZIA
Click here to see the company’s payout ratio, plus analyst estimates of its future dividends.
XTRA:PAT Historic Dividend June 7th 2026 Have Earnings And Dividends Been Growing?
When earnings decline, dividend companies become much harder to analyse and own safely. If earnings decline and the company is forced to cut its dividend, investors could watch the value of their investment go up in smoke. PATRIZIA’s earnings per share have fallen at approximately 13% a year over the previous five years. When earnings per share fall, the maximum amount of dividends that can be paid also falls.
Many investors will assess a company’s dividend performance by evaluating how much the dividend payments have changed over time. PATRIZIA has delivered 4.7% dividend growth per year on average over the past eight years. The only way to pay higher dividends when earnings are shrinking is either to pay out a larger percentage of profits, spend cash from the balance sheet, or borrow the money. PATRIZIA is already paying out 173% of its profits, and with shrinking earnings we think it’s unlikely that this dividend will grow quickly in the future.
To Sum It Up
Is PATRIZIA worth buying for its dividend? It’s never fun to see a company’s earnings per share in retreat. Worse, PATRIZIA’s paying out a majority of its earnings and more than half its free cash flow. Positive cash flows are good news but it’s not a good combination. Bottom line: PATRIZIA has some unfortunate characteristics that we think could lead to sub-optimal outcomes for dividend investors.
Although, if you’re still interested in PATRIZIA and want to know more, you’ll find it very useful to know what risks this stock faces. For example, we’ve found 1 warning sign for PATRIZIA that we recommend you consider before investing in the business.
If you’re in the market for strong dividend payers, we recommend checking our selection of top 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.