AT & S Austria Technologie & Systemtechnik's (VIE:ATS) Upcoming Dividend Will Be Larger Than Last Year's

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. Based on the announced payment, the dividend yield for the company will be 2.0%, which is fairly typical for the industry.

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

AT & S Austria Technologie & Systemtechnik's Payment Has Solid Earnings Coverage

We like to see a healthy dividend yield, but that is only helpful to us if the payment can continue. Before making this announcement, AT & S Austria Technologie & Systemtechnik was easily earning enough to cover the dividend. As a result, a large proportion of what it earned was being reinvested back into the business.

Over the next year, EPS is forecast to expand by 37.3%. If the dividend continues on this path, the payout ratio could be 42% by next year, which we think can be pretty sustainable going forward.

Dividend Volatility

The company's dividend history has been marked by instability, with at least 1 cut in the last 10 years. Since 2012, the first annual payment was €0.36, compared to the most recent full-year payment of €0.78. This means that it has been growing its distributions at 8.0% per annum over that time. It's good to see the dividend growing at a decent rate, but the dividend has been cut at least once in the past. AT & S Austria Technologie & Systemtechnik might have put its house in order since then, but we remain cautious.

We Could See AT & S Austria Technologie & Systemtechnik'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. AT & S Austria Technologie & Systemtechnik has impressed us by growing EPS at 7.4% per 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.

Our Thoughts On AT & S Austria Technologie & Systemtechnik's Dividend

In summary, it's great to see that the company can raise the dividend and keep it in a sustainable range. The dividend has been at reasonable levels historically, but that hasn't translated into a consistent payment. Taking all of this into consideration, the dividend looks viable moving forward, but investors should be mindful that the company has pushed the boundaries of sustainability in the past and may do so again.

Market movements attest to how highly valued a consistent dividend policy is compared to one which is more unpredictable. Still, investors need to consider a host of other factors, apart from dividend payments, when analysing a company. For instance, we've picked out 4 warning signs for AT & S Austria Technologie & Systemtechnik that investors should take into consideration. Is AT & S Austria Technologie & Systemtechnik not quite the opportunity you were looking for? Why not check out our selection of top dividend stocks.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.