Coop Pank (TAL:CPA1T) Will Pay A Larger Dividend Than Last Year At €0.087

The board of Coop Pank AS (TAL:CPA1T) has announced that it will be paying its dividend of €0.087 on the 7th of May, an increased payment from last year's comparable dividend. Although the dividend is now higher, the yield is only 3.7%, which is below the industry average.

See our latest analysis for Coop Pank

Coop Pank's Earnings Will Easily Cover The Distributions

If it is predictable over a long period, even low dividend yields can be attractive.

Coop Pank has a short history of paying out dividends, with its current track record at only 2 years. Based on its last earnings report however, the payout ratio is at a comfortable 23%, meaning that Coop Pank may be able to sustain this dividend for future years if it continues on this earnings trend.

Over the next year, EPS could expand by 36.3% if recent trends continue. Assuming the dividend continues along recent trends, we think the future payout ratio could be 17% by next year, which is in a pretty sustainable range.

Coop Pank Is Still Building Its Track Record

The dividend has been pretty stable looking back, but the company hasn't been paying one for very long. This makes it tough to judge how it would fare through a full economic cycle. The annual payment during the last 2 years was €0.03 in 2022, and the most recent fiscal year payment was €0.087. This implies that the company grew its distributions at a yearly rate of about 70% over that duration. Coop Pank has been growing its dividend quite rapidly, which is exciting. However, the short payment history makes us question whether this performance will persist across a full market cycle.

The Dividend Looks Likely To Grow

Investors who have held shares in the company for the past few years will be happy with the dividend income they have received. It's encouraging to see that Coop Pank has been growing its earnings per share at 36% a year over the past five years. Rapid earnings growth and a low payout ratio suggest this company has been effectively reinvesting in its business. Should that continue, this company could have a bright future.

We Really Like Coop Pank's Dividend

Overall, we think this could be an attractive income stock, and it is only getting better by paying a higher dividend this year. The company is easily earning enough to cover its dividend payments and it is great to see that these earnings are being translated into cash flow. All in all, this checks a lot of the boxes we look for when choosing an income stock.

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 Coop Pank that you should be aware of before investing. Is Coop Pank 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.