ADM Hamburg (FRA:OEL) Has Announced A Dividend Of €13.58

ADM Hamburg Aktiengesellschaft's (FRA:OEL) investors are due to receive a payment of €13.58 per share on 26th of August. This makes the dividend yield 5.9%, which will augment investor returns quite nicely.

This technology could replace computers: discover the 20 stocks are working to make quantum computing a reality.

ADM Hamburg's Projections Indicate Future Payments May Be Unsustainable

Estimates Indicate ADM Hamburg's Could Struggle to Maintain Dividend Payments In The Future

ADM Hamburg's Future Dividends May Potentially Be At Risk

If the payments aren't sustainable, a high yield for a few years won't matter that much. Even though ADM Hamburg is not generating a profit, it is still paying a dividend. The company is also yet to generate cash flow, so the dividend sustainability is definitely questionable.

EPS is set to grow by 9.3% over the next year if recent trends continue. However, if the dividend continues along recent trends, it could start putting pressure on the balance sheet with the payout ratio reaching 3,650% over the next year.

See our latest analysis for ADM Hamburg

ADM Hamburg Doesn't Have A Long Payment History

It is great to see that ADM Hamburg has been paying a stable dividend for a number of years now, however we want to be a bit cautious about whether this will remain true through a full economic cycle. The payments haven't really changed that much since 5 years ago. It's good to see at least some dividend growth. Yet with a relatively short dividend paying history, we wouldn't want to depend on this dividend too heavily.

The Dividend Has Growth Potential

The company's investors will be pleased to have been receiving dividend income for some time. ADM Hamburg has seen EPS rising for the last five years, at 9.3% per annum. It's not an ideal situation that the company isn't turning a profit but the growth recently is a positive sign. If the company can become profitable soon, continuing on this trajectory would bode well for the future of the dividend.

The Dividend Could Prove To Be Unreliable

In summary, while it's good to see that the dividend hasn't been cut, we are a bit cautious about ADM Hamburg's payments, as there could be some issues with sustaining them into the future. Strong earnings growth means ADM Hamburg has the potential to be a good dividend stock in the future, despite the current payments being at elevated levels. This company is not in the top tier of income providing stocks.

Investors generally tend to favour companies with a consistent, stable dividend policy as opposed to those operating an irregular one. At the same time, there are other factors our readers should be conscious of before pouring capital into a stock. Just as an example, we've come across 2 warning signs for ADM Hamburg you should be aware of, and 1 of them can't be ignored. Is ADM Hamburg not quite the opportunity you were looking for? Why not check out our selection of top dividend stocks.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.