WASGAU Produktions & Handels (FRA:MSH) Will Pay A Dividend Of €0.12

The board of WASGAU Produktions & Handels AG (FRA:MSH) has announced that it will pay a dividend of €0.12 per share on the 10th of June. Including this payment, the dividend yield on the stock will be 1.2%, which is a modest boost for shareholders' returns.

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WASGAU Produktions & Handels' Payment Could Potentially Have Solid Earnings Coverage

If it is predictable over a long period, even low dividend yields can be attractive. However, prior to this announcement, WASGAU Produktions & Handels' dividend was comfortably covered by both cash flow and earnings. This means that most of its earnings are being retained to grow the business.

If the trend of the last few years continues, EPS will grow by 7.0% over the next 12 months. If the dividend continues along recent trends, we estimate the payout ratio will be 19%, which is in the range that makes us comfortable with the sustainability of the dividend.

See our latest analysis for WASGAU Produktions & Handels

Dividend Volatility

The company has a long dividend track record, but it doesn't look great with cuts in the past. The payments haven't really changed that much since 10 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.

WASGAU Produktions & Handels Could Grow Its Dividend

Given that the dividend has been cut in the past, we need to check if earnings are growing and if that might lead to stronger dividends in the future. WASGAU Produktions & Handels has seen EPS rising for the last five years, at 7.0% per annum. With a decent amount of growth and a low payout ratio, we think this bodes well for WASGAU Produktions & Handels' prospects of growing its dividend payments in the future.

Our Thoughts On WASGAU Produktions & Handels' Dividend

Overall, we think WASGAU Produktions & Handels is a solid choice as a dividend stock, even though the dividend wasn't raised this year. The payout ratio looks good, but unfortunately the company's dividend track record isn't stellar. The payment isn't stellar, but it could make a decent addition to a dividend portfolio.

Investors generally tend to favour companies with a consistent, stable dividend policy as opposed to those operating an irregular one. However, there are other things to consider for investors when analysing stock performance. Just as an example, we've come across 4 warning signs for WASGAU Produktions & Handels you should be aware of, and 3 of them are potentially serious. Looking for more high-yielding dividend ideas? Try our collection of strong dividend payers.

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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.