Atresmedia Corporación de Medios de Comunicación (BME:A3M) Is Due To Pay A Dividend Of €0.1701

Atresmedia Corporación de Medios de Comunicación, S.A.'s (BME:A3M) investors are due to receive a payment of €0.1701 per share on 18th of December. This will take the dividend yield to an attractive 9.3%, providing a nice boost to shareholder returns.

See our latest analysis for Atresmedia Corporación de Medios de Comunicación

Atresmedia Corporación de Medios de Comunicación's Future Dividend Projections Appear Well Covered By Earnings

We like to see robust dividend yields, but that doesn't matter if the payment isn't sustainable. However, prior to this announcement, Atresmedia Corporación de Medios de Comunicación's dividend was comfortably covered by both cash flow and earnings. As a result, a large proportion of what it earned was being reinvested back into the business.

Looking forward, earnings per share is forecast to fall by 34.6% over the next year. If the dividend continues along the path it has been on recently, we estimate the payout ratio could be 73%, which is comfortable for the company to continue in the future.

Dividend Volatility

Although the company has a long dividend history, it has been cut at least once in the last 10 years. Since 2014, the dividend has gone from €0.11 total annually to €0.42. This works out to be a compound annual growth rate (CAGR) of approximately 14% a year over that time. Despite the rapid growth in the dividend over the past number of years, we have seen the payments go down the past as well, so that makes us cautious.

The Dividend Looks Likely To Grow

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. Atresmedia Corporación de Medios de Comunicación has seen EPS rising for the last five years, at 15% per annum. With a decent amount of growth and a low payout ratio, we think this bodes well for Atresmedia Corporación de Medios de Comunicación's prospects of growing its dividend payments in the future.

We Really Like Atresmedia Corporación de Medios de Comunicación's Dividend

Overall, a dividend increase is always good, and we think that Atresmedia Corporación de Medios de Comunicación is a strong income stock thanks to its track record and growing earnings. The distributions are easily covered by earnings, and there is plenty of cash being generated as well. However, it is worth noting that the earnings are expected to fall over the next year, which may not change the long term outlook, but could affect the dividend payment in the next 12 months. All of these factors considered, we think this has solid potential as a dividend stock.

Companies possessing a stable dividend policy will likely enjoy greater investor interest than those suffering from a more inconsistent approach. At the same time, there are other factors our readers should be conscious of before pouring capital into a stock. For example, we've identified 2 warning signs for Atresmedia Corporación de Medios de Comunicación (1 is concerning!) that you should be aware of before investing. 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.