Altius Minerals (TSE:ALS) Will Pay A Dividend Of CA$0.08

The board of Altius Minerals Corporation (TSE:ALS) has announced that it will pay a dividend of CA$0.08 per share on the 30th of June. The dividend yield is 1.5% based on this payment, which is a little bit low compared to the other companies in the industry.

See our latest analysis for Altius Minerals

Altius Minerals' Earnings Easily Cover The Distributions

Even a low dividend yield can be attractive if it is sustained for years on end. The last dividend was quite easily covered by Altius Minerals' earnings. This means that a large portion of its earnings are being retained to grow the business.

EPS is set to fall by 15.7% over the next 12 months. If the dividend continues along the path it has been on recently, we estimate the payout ratio could be 69%, which is comfortable for the company to continue in the future.

Altius Minerals Doesn't Have A Long Payment History

Even though the company has been paying a consistent dividend for a while, we would like to see a few more years before we feel comfortable relying on it. Since 2015, the annual payment back then was CA$0.08, compared to the most recent full-year payment of CA$0.32. This works out to be a compound annual growth rate (CAGR) of approximately 19% a year over that time. The dividend has been growing rapidly, however with such a short payment history we can't know for sure if payment can continue to grow over the long term, so caution may be warranted.

Dividend Growth May Be Hard To Achieve

Investors could be attracted to the stock based on the quality of its payment history. Altius Minerals hasn't seen much change in its earnings per share over the last five years. Growth of 0.2% per annum is not particularly high, which might explain why the company is paying out a higher proportion of earnings. This could mean the dividend doesn't have the growth potential we look for going into the future.

Our Thoughts On Altius Minerals' Dividend

Overall, we think Altius Minerals is a solid choice as a dividend stock, even though the dividend wasn't raised this year. While the payout ratios are a good sign, we are less enthusiastic about the company's dividend record. The payment isn't stellar, but it could make a decent addition to a dividend portfolio.

Companies possessing a stable dividend policy will likely enjoy greater investor interest than those suffering from a more inconsistent approach. However, there are other things to consider for investors when analysing stock performance. As an example, we've identified 1 warning sign for Altius Minerals that you should be aware of before investing. Is Altius Minerals not quite the opportunity you were looking for? Why not check out our selection of top 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.