Arteche Lantegi Elkartea (BME:ART) Is Paying Out A Larger Dividend Than Last Year

The board of Arteche Lantegi Elkartea, S.A. (BME:ART) has announced that it will be paying its dividend of €0.1341 on the 14th of May, an increased payment from last year's comparable dividend. Based on this payment, the dividend yield for the company will be 2.1%, which is fairly typical for the industry.

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Arteche Lantegi Elkartea's Future Dividend Projections Appear Well Covered By Earnings

We like to see a healthy dividend yield, but that is only helpful to us if the payment can continue. The last dividend was quite easily covered by Arteche Lantegi Elkartea's earnings. This indicates that a lot of the earnings are being reinvested into the business, with the aim of fueling growth.

The next year is set to see EPS grow by 77.2%. If the dividend continues on this path, the payout ratio could be 20% by next year, which we think can be pretty sustainable going forward.

See our latest analysis for Arteche Lantegi Elkartea

Arteche Lantegi Elkartea Is Still Building Its Track Record

Looking back, the dividend has been stable, but the company hasn't been paying a dividend for very long so we can't be confident that the dividend will remain stable through all economic environments. The annual payment during the last 3 years was €0.045 in 2022, and the most recent fiscal year payment was €0.166. This means that it has been growing its distributions at 54% per annum over that time. We're not overly excited about the relatively short history of dividend payments, however the dividend is growing at a nice rate and we might take a closer look.

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 Arteche Lantegi Elkartea has been growing its earnings per share at 33% a year over the past three years. The company's earnings per share has grown rapidly in recent years, and it has a good balance between reinvesting and paying dividends to shareholders, so we think that Arteche Lantegi Elkartea could prove to be a strong dividend payer.

Arteche Lantegi Elkartea Looks Like A Great Dividend Stock

In summary, it is always positive to see the dividend being increased, and we are particularly pleased with its overall sustainability. 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. Taking this all into consideration, this looks like it could be a good dividend opportunity.

Market movements attest to how highly valued a consistent dividend policy is compared to one which is more unpredictable. Meanwhile, despite the importance of dividend payments, they are not the only factors our readers should know when assessing a company. Taking the debate a bit further, we've identified 1 warning sign for Arteche Lantegi Elkartea that investors need to be conscious of moving forward. Looking for more high-yielding dividend ideas? Try our collection of strong dividend payers.

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