Ackermans & Van Haaren (EBR:ACKB) Is Increasing Its Dividend To €1.93

Ackermans & Van Haaren NV's (EBR:ACKB) dividend will be increasing to €1.93 on 1st of June. Despite this raise, the dividend yield of 1.1% is only a modest boost to shareholder returns.

View our latest analysis for Ackermans & Van Haaren

Ackermans & Van Haaren's Payment Has Solid Earnings Coverage

The dividend yield is a little bit low, but sustainability of the payments is also an important part of evaluating an income stock. However, prior to this announcement, Ackermans & Van Haaren's dividend was comfortably covered by both cash flow and earnings. This means that most of its earnings are being retained to grow the business.

Over the next year, EPS is forecast to expand by 37.6%. If the dividend continues on this path, the payout ratio could be 12% by next year, which we think can be pretty sustainable going forward.

Ackermans & Van Haaren Has A Solid Track Record

The company has an extended history of paying stable dividends. Since 2012, the first annual payment was €1.64, compared to the most recent full-year payment of €2.75. This works out to be a compound annual growth rate (CAGR) of approximately 5.3% a year over that time. The growth of the dividend has been pretty reliable, so we think this can offer investors some nice additional income in their portfolio.

The Dividend Looks Likely To Grow

Some investors will be chomping at the bit to buy some of the company's stock based on its dividend history. It's encouraging to see Ackermans & Van Haaren has been growing its earnings per share at 13% a year over the past five years. Ackermans & Van Haaren definitely has the potential to grow its dividend in the future with earnings on an uptrend and a low payout ratio.

We Really Like Ackermans & Van Haaren's Dividend

Overall, a dividend increase is always good, and we think that Ackermans & Van Haaren is a strong income stock thanks to its track record and growing earnings. The company is easily earning enough to cover its dividend payments and it is great to see that these earnings are being translated into cash flow. Taking this all into consideration, this looks like it could be a good dividend opportunity.

Investors generally tend to favour companies with a consistent, stable dividend policy as opposed to those operating an irregular one. However, there are other things to consider for investors when analysing stock performance. See if management have their own wealth at stake, by checking insider shareholdings in Ackermans & Van Haaren stock. 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.