Flughafen Wien's (VIE:FLU) Shareholders Will Receive A Bigger Dividend Than Last Year

The board of Flughafen Wien Aktiengesellschaft (VIE:FLU) has announced that it will be paying its dividend of €1.65 on the 16th of June, an increased payment from last year's comparable dividend. This makes the dividend yield about the same as the industry average at 3.0%.

We've discovered 1 warning sign about Flughafen Wien. View them for free.

Flughafen Wien's Projected Earnings Seem Likely To Cover Future Distributions

Solid dividend yields are great, but they only really help us if the payment is sustainable. Prior to this announcement, Flughafen Wien'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 7.0%. Assuming the dividend continues along recent trends, we think the payout ratio could be 66% by next year, which is in a pretty sustainable range.

See our latest analysis for Flughafen Wien

Dividend Volatility

The company has a long dividend track record, but it doesn't look great with cuts in the past. The dividend has gone from an annual total of €0.413 in 2015 to the most recent total annual payment of €1.65. This means that it has been growing its distributions at 15% per annum over that time. Dividends have grown rapidly over this time, but with cuts in the past we are not certain that this stock will be a reliable source of income in the future.

The Dividend Has Growth Potential

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. Flughafen Wien has seen EPS rising for the last five years, at 7.8% per annum. Since earnings per share is growing at an acceptable rate, and the payout policy is balanced, we think the company is positioning itself well to grow earnings and dividends in the future.

Our Thoughts On Flughafen Wien's Dividend

In summary, it's great to see that the company can raise the dividend and keep it in a sustainable range. While the payout ratios are a good sign, we are less enthusiastic about the company's dividend record. The dividend looks okay, but there have been some issues in the past, so we would be a little bit cautious.

Market movements attest to how highly valued a consistent dividend policy is compared to one which is more unpredictable. Meanwhile, despite the importance of dividend payments, they are not the only factors our readers should know when assessing a company. For instance, we've picked out 1 warning sign for Flughafen Wien that investors should take into consideration. Is Flughafen Wien not quite the opportunity you were looking for? Why not check out our selection of top dividend stocks.

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