Ackermans & Van Haaren (EBR:ACKB) Is Paying Out A Larger Dividend Than Last Year

Ackermans & Van Haaren NV (EBR:ACKB) has announced that it will be increasing its dividend from last year's comparable payment on the 2nd of June to €2.66. Even though the dividend went up, the yield is still quite low at only 1.7%.

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Ackermans & Van Haaren's Payment Could Potentially Have 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, Ackermans & Van Haaren's earnings easily cover the dividend. As a result, a large proportion of what it earned was being reinvested back into the business.

The next year is set to see EPS grow by 24.8%. If the dividend continues on this path, the payout ratio could be 16% by next year, which we think can be pretty sustainable going forward.

View our latest analysis for Ackermans & Van Haaren

Ackermans & Van Haaren Has A Solid Track Record

The company has an extended history of paying stable dividends. The dividend has gone from an annual total of €1.82 in 2015 to the most recent total annual payment of €3.80. This works out to be a compound annual growth rate (CAGR) of approximately 7.6% 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's Growth Prospects Are Limited

Investors could be attracted to the stock based on the quality of its payment history. Earnings per share has been crawling upwards at 3.4% per year. While EPS growth is quite low, Ackermans & Van Haaren has the option to increase the payout ratio to return more cash to shareholders.

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. All in all, this checks a lot of the boxes we look for when choosing an income stock.

Market movements attest to how highly valued a consistent dividend policy is compared to one which is more unpredictable. However, there are other things to consider for investors when analysing stock performance. Companies that are growing earnings tend to be the best dividend stocks over the long term. See what the 3 analysts we track are forecasting for Ackermans & Van Haaren for free with public analyst estimates for the company. 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.