Schoeller-Bleckmann Oilfield Equipment (VIE:SBO) Is Paying Out Less In Dividends Than Last Year

Schoeller-Bleckmann Oilfield Equipment Aktiengesellschaft (VIE:SBO) is reducing its dividend from last year's comparable payment to €1.75 on the 15th of May. However, the dividend yield of 5.6% is still a decent boost to shareholder returns.

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Schoeller-Bleckmann Oilfield Equipment's Payment Could Potentially Have Solid Earnings Coverage

A big dividend yield for a few years doesn't mean much if it can't be sustained. Prior to this announcement, Schoeller-Bleckmann Oilfield Equipment's dividend was comfortably covered by both cash flow and earnings. This means that a large portion of its earnings are being retained to grow the business.

Over the next year, EPS is forecast to expand by 41.2%. Assuming the dividend continues along recent trends, we think the payout ratio could be 47% by next year, which is in a pretty sustainable range.

See our latest analysis for Schoeller-Bleckmann Oilfield Equipment

Dividend Volatility

The company has a long dividend track record, but it doesn't look great with cuts in the past. Since 2015, the annual payment back then was €1.50, compared to the most recent full-year payment of €1.75. This implies that the company grew its distributions at a yearly rate of about 1.6% over that duration. We're glad to see the dividend has risen, but with a limited rate of growth and fluctuations in the payments the total shareholder return may be limited.

We Could See Schoeller-Bleckmann Oilfield Equipment's Dividend Growing

Given that the dividend has been cut in the past, we need to check if earnings are growing and if that might lead to stronger dividends in the future. It's encouraging to see that Schoeller-Bleckmann Oilfield Equipment has been growing its earnings per share at 7.3% a year over the past five years. Earnings are on the uptrend, and it is only paying a small portion of those earnings to shareholders.

Our Thoughts On Schoeller-Bleckmann Oilfield Equipment's Dividend

Even though the dividend was cut this year, we think Schoeller-Bleckmann Oilfield Equipment has the ability to make consistent payments in the future. While the payout ratios are a good sign, we are less enthusiastic about the company's dividend record. The payment isn't stellar, but it could make a decent addition to a dividend portfolio.

Companies possessing a stable dividend policy will likely enjoy greater investor interest than those suffering from a more inconsistent approach. Meanwhile, despite the importance of dividend payments, they are not the only factors our readers should know when assessing a company. Taking the debate a bit further, we've identified 2 warning signs for Schoeller-Bleckmann Oilfield Equipment that investors need to be conscious of moving forward. If you are a dividend investor, you might also want to look at our curated 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.