DATA MODUL Produktion und Vertrieb von elektronischen Systemen's (ETR:DAM) Shareholders Will Receive A Bigger Dividend Than Last Year

DATA MODUL Aktiengesellschaft, Produktion und Vertrieb von elektronischen Systemen (ETR:DAM) will increase its dividend from last year's comparable payment on the 13th of May to €0.75. This makes the dividend yield 3.0%, which is above the industry average.

DATA MODUL Produktion und Vertrieb von elektronischen Systemen's Payment Could Potentially Have Solid Earnings Coverage

While it is great to have a strong dividend yield, we should also consider whether the payment is sustainable. Based on the last payment, DATA MODUL Produktion und Vertrieb von elektronischen Systemen was quite comfortably earning enough to cover the dividend. This means that a large portion of its earnings are being retained to grow the business.

Looking forward, earnings per share is forecast to rise by 77.0% over the next year. Assuming the dividend continues along recent trends, we think the payout ratio could be 25% by next year, which is in a pretty sustainable range.

See our latest analysis for DATA MODUL Produktion und Vertrieb von elektronischen Systemen

DATA MODUL Produktion und Vertrieb von elektronischen Systemen Has A Solid Track Record

The company has an extended history of paying stable dividends. Since 2015, the dividend has gone from €0.12 total annually to €0.75. This means that it has been growing its distributions at 20% per annum over that time. Rapidly growing dividends for a long time is a very valuable feature for an income stock.

DATA MODUL Produktion und Vertrieb von elektronischen Systemen May Find It Hard To Grow The Dividend

The company's investors will be pleased to have been receiving dividend income for some time. However, initial appearances might be deceiving. In the last five years, DATA MODUL Produktion und Vertrieb von elektronischen Systemen's earnings per share has shrunk at approximately 3.0% per annum. Declining earnings will inevitably lead to the company paying a lower dividend in line with lower profits. It's not all bad news though, as the earnings are predicted to rise over the next 12 months - we would just be a bit cautious until this can turn into a longer term trend.

Our Thoughts On DATA MODUL Produktion und Vertrieb von elektronischen Systemen's Dividend

In summary, it's great to see that the company can raise the dividend and keep it in a sustainable range. With shrinking earnings, the company may see some issues maintaining the dividend even though they look pretty sustainable for now. Taking all of this into consideration, the dividend looks viable moving forward, but investors should be mindful that the company has pushed the boundaries of sustainability in the past and may do so again.

It's important to note that companies having a consistent dividend policy will generate greater investor confidence than those having an erratic one. However, there are other things to consider for investors when analysing stock performance. For example, we've picked out 3 warning signs for DATA MODUL Produktion und Vertrieb von elektronischen Systemen that investors should know about before committing capital to this stock. 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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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.