TAG Immobilien AG (ETR:TEG) is about to trade ex-dividend in the next four days. The ex-dividend date is commonly two business days before the record date, which is the cut-off date for shareholders to be present on the company's books to be eligible for a dividend payment. It is important to be aware of the ex-dividend date because any trade on the stock needs to have been settled on or before the record date. This means that investors who purchase TAG Immobilien's shares on or after the 19th of May will not receive the dividend, which will be paid on the 17th of June.

The company's upcoming dividend is €0.40 a share, following on from the last 12 months, when the company distributed a total of €0.40 per share to shareholders. Looking at the last 12 months of distributions, TAG Immobilien has a trailing yield of approximately 2.9% on its current stock price of €13.89. Dividends are a major contributor to investment returns for long term holders, but only if the dividend continues to be paid. So we need to check whether the dividend payments are covered, and if earnings are growing.

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Dividends are typically paid out of company income, so if a company pays out more than it earned, its dividend is usually at a higher risk of being cut. TAG Immobilien is paying out an acceptable 58% of its profit, a common payout level among most companies.

See our latest analysis for TAG Immobilien

Click here to see the company's payout ratio, plus analyst estimates of its future dividends.XTRA:TEG Historic Dividend May 14th 2025

Have Earnings And Dividends Been Growing?

When earnings decline, dividend companies become much harder to analyse and own safely. If business enters a downturn and the dividend is cut, the company could see its value fall precipitously. Readers will understand then, why we're concerned to see TAG Immobilien's earnings per share have dropped 26% a year over the past five years. Ultimately, when earnings per share decline, the size of the pie from which dividends can be paid, shrinks.

Another key way to measure a company's dividend prospects is by measuring its historical rate of dividend growth. TAG Immobilien has seen its dividend decline 3.1% per annum on average over the past 10 years, which is not great to see. While it's not great that earnings and dividends per share have fallen in recent years, we're encouraged by the fact that management has trimmed the dividend rather than risk over-committing the company in a risky attempt to maintain yields to shareholders.

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Final Takeaway

Has TAG Immobilien got what it takes to maintain its dividend payments? We're not overly enthused to see TAG Immobilien's earnings in retreat at the same time as the company is paying out more than half of its earnings as dividends to shareholders. It doesn't appear an outstanding opportunity, but could be worth a closer look.

If you want to look further into TAG Immobilien, it's worth knowing the risks this business faces. Our analysis shows 3 warning signs for TAG Immobilien that we strongly recommend you have a look at before investing in the company.

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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.

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