ADENTRA (TSE:ADEN) Will Pay A Dividend Of $0.14

ADENTRA Inc.'s (TSE:ADEN) investors are due to receive a payment of $0.14 per share on 26th of April. Although the dividend is now higher, the yield is only 1.3%, which is below the industry average.

View our latest analysis for ADENTRA

ADENTRA's Payment Has Solid Earnings Coverage

It would be nice for the yield to be higher, but we should also check if higher levels of dividend payment would be sustainable. However, prior to this announcement, ADENTRA'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.

Looking forward, earnings per share is forecast to rise by 119.4% over the next year. If the dividend continues along recent trends, we estimate the payout ratio will be 17%, which is in the range that makes us comfortable with the sustainability of the dividend.

ADENTRA Has A Solid Track Record

The company has a sustained record of paying dividends with very little fluctuation. Since 2014, the annual payment back then was $0.132, compared to the most recent full-year payment of $0.406. This works out to be a compound annual growth rate (CAGR) of approximately 12% a year over that time. We can see that payments have shown some very nice upward momentum without faltering, which provides some reassurance that future payments will also be reliable.

ADENTRA Could Grow Its Dividend

The company's investors will be pleased to have been receiving dividend income for some time. ADENTRA has seen EPS rising for the last five years, at 8.2% per annum. With a decent amount of growth and a low payout ratio, we think this bodes well for ADENTRA's prospects of growing its dividend payments in the future.

We Really Like ADENTRA's Dividend

Overall, a dividend increase is always good, and we think that ADENTRA is a strong income stock thanks to its track record and growing earnings. Earnings are easily covering distributions, and the company is generating plenty of cash. 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. To that end, ADENTRA has 2 warning signs (and 1 which is potentially serious) we think you should know about. Is ADENTRA not quite the opportunity you were looking for? Why not check out our selection of top dividend stocks.

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