Dierig Holding (ETR:DIE) Is Increasing Its Dividend To €0.25

Dierig Holding AG (ETR:DIE) has announced that it will be increasing its periodic dividend on the 26th of May to €0.25, which will be 25% higher than last year's comparable payment amount of €0.20. This takes the dividend yield to 2.4%, which shareholders will be pleased with.

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

Dierig Holding's Future Dividend Projections Appear Well Covered By Earnings

If the payments aren't sustainable, a high yield for a few years won't matter that much. However, Dierig Holding's earnings easily cover the dividend. As a result, a large proportion of what it earned was being reinvested back into the business.

Looking forward, earnings per share could rise by 61.1% over the next year if the trend from the last few years continues. If the dividend continues along recent trends, we estimate the payout ratio will be 26%, which is in the range that makes us comfortable with the sustainability of the dividend.

See our latest analysis for Dierig Holding

Dividend Volatility

The company has a long dividend track record, but it doesn't look great with cuts in the past. The last annual payment of €0.20 was flat on the annual payment from10 years ago. We're glad to see the dividend has risen, but with a limited rate of growth and fluctuations in the payments the total shareholder return may be limited.

The Dividend Looks Likely To Grow

With a relatively unstable dividend, it's even more important to see if earnings per share is growing. We are encouraged to see that Dierig Holding has grown earnings per share at 61% per year over the past five years. A low payout ratio gives the company a lot of flexibility, and growing earnings also make it very easy for it to grow the dividend.

We Really Like Dierig Holding's Dividend

Overall, a dividend increase is always good, and we think that Dierig Holding 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 of these factors considered, we think this has solid potential as a dividend 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. As an example, we've identified 2 warning signs for Dierig Holding that you should be aware of before investing. 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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