AT & S Austria Technologie & Systemtechnik (VIE:ATS) Will Pay A Larger Dividend Than Last Year At €0.90

The board of AT & S Austria Technologie & Systemtechnik Aktiengesellschaft (VIE:ATS) has announced that it will be increasing its dividend on the 28th of July to €0.90. This takes the annual payment to 2.0% of the current stock price, which is about average for the industry.

See our latest analysis for AT & S Austria Technologie & Systemtechnik

AT & S Austria Technologie & Systemtechnik's Dividend Is Well Covered By Earnings

We like a dividend to be consistent over the long term, so checking whether it is sustainable is important. However, AT & S Austria Technologie & Systemtechnik's earnings easily cover the dividend. This means that most of what the business earns is being used to help it grow.

The next year is set to see EPS grow by 49.7%. If the dividend continues along recent trends, we estimate the payout ratio will be 27%, which is in the range that makes us comfortable with the sustainability of the dividend.

Dividend Volatility

Although the company has a long dividend history, it has been cut at least once in the last 10 years. The first annual payment during the last 10 years was €0.32 in 2012, and the most recent fiscal year payment was €0.78. This means that it has been growing its distributions at 9.3% per annum over that time. A reasonable rate of dividend growth is good to see, but we're wary that the dividend history is not as solid as we'd like, having been cut at least once.

The Dividend Looks Likely To Grow

With a relatively unstable dividend, it's even more important to evaluate if earnings per share is growing, which could point to a growing dividend in the future. It's encouraging to see AT & S Austria Technologie & Systemtechnik has been growing its earnings per share at 12% a year over the past five years. AT & S Austria Technologie & Systemtechnik definitely has the potential to grow its dividend in the future with earnings on an uptrend and a low payout ratio.

AT & S Austria Technologie & Systemtechnik Looks Like A Great Dividend Stock

Overall, we think this could be an attractive income stock, and it is only getting better by paying a higher dividend this year. Distributions are quite easily covered by earnings, which are also being converted to cash flows. All in all, this checks a lot of the boxes we look for when choosing an income stock.

Investors generally tend to favour companies with a consistent, stable dividend policy as opposed to those operating an irregular one. At the same time, there are other factors our readers should be conscious of before pouring capital into a stock. As an example, we've identified 1 warning sign for AT & S Austria Technologie & Systemtechnik that you should be aware of before investing. Looking for more high-yielding dividend ideas? Try our collection of strong dividend payers.

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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.