Azelis Group's (EBR:AZE) Shareholders Will Receive A Bigger Dividend Than Last Year

Azelis Group NV (EBR:AZE) will increase its dividend from last year's comparable payment on the 1st of July to €0.161. This takes the annual payment to 1.7% of the current stock price, which unfortunately is below what the industry is paying.

Our free stock report includes 2 warning signs investors should be aware of before investing in Azelis Group. Read for free now.

Azelis Group's Future Dividend Projections Appear Well Covered By Earnings

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, Azelis Group's dividend was comfortably covered by both cash flow and earnings. 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 47.7%. If the dividend continues on this path, the payout ratio could be 15% by next year, which we think can be pretty sustainable going forward.

View our latest analysis for Azelis Group

Azelis Group's Dividend Has Lacked Consistency

Looking back, the company hasn't been paying the most consistent dividend, but with such a short dividend history it could be too early to draw solid conclusions. The annual payment during the last 3 years was €0.03 in 2022, and the most recent fiscal year payment was €0.23. This implies that the company grew its distributions at a yearly rate of about 97% over that duration. Azelis Group has grown distributions at a rapid rate despite cutting the dividend at least once in the past. Companies that cut once often cut again, so we would be cautious about buying this stock solely for the dividend income.

The Dividend Looks Likely To Grow

Growing earnings per share could be a mitigating factor when considering the past fluctuations in the dividend. It's encouraging to see that Azelis Group has been growing its earnings per share at 79% a year over the past five years. Rapid earnings growth and a low payout ratio suggest this company has been effectively reinvesting in its business. Should that continue, this company could have a bright future.

Azelis Group Looks Like A Great Dividend Stock

Overall, a dividend increase is always good, and we think that Azelis Group is a strong income stock thanks to its track record and growing earnings. 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.

Companies possessing a stable dividend policy will likely enjoy greater investor interest than those suffering from a more inconsistent approach. At the same time, there are other factors our readers should be conscious of before pouring capital into a stock. To that end, Azelis Group has 2 warning signs (and 1 which is concerning) we think you should know about. 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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