Inmobiliaria del Sur's (BME:ISUR) Dividend Will Be €0.1215

Inmobiliaria del Sur, S.A.'s (BME:ISUR) investors are due to receive a payment of €0.1215 per share on 1st of July. This means that the dividend yield is 3.9%, which is a bit low when comparing to other companies in the industry.

View our latest analysis for Inmobiliaria del Sur

Inmobiliaria del Sur's Payment Has Solid Earnings Coverage

It would be nice for the yield to be higher, but we should also check if higher levels of dividend payment would be sustainable. Prior to this announcement, Inmobiliaria del Sur's dividend was comfortably covered by both cash flow and earnings. This means that a large portion of its earnings are being retained to grow the business.

Over the next year, EPS is forecast to expand by 156.5%. If the dividend continues on this path, the payout ratio could be 17% by next year, which we think can be pretty sustainable going forward.

Dividend Volatility

While the company has been paying a dividend for a long time, it has cut the dividend at least once in the last 10 years. The annual payment during the last 10 years was €0.07 in 2014, and the most recent fiscal year payment was €0.29. This implies that the company grew its distributions at a yearly rate of about 15% over that duration. 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.

Inmobiliaria del Sur May Find It Hard To Grow The Dividend

With a relatively unstable dividend, it's even more important to evaluate if earnings per share is growing, which could point to a growing dividend in the future. Unfortunately, Inmobiliaria del Sur's earnings per share has been essentially flat over the past five years, which means the dividend may not be increased each year. Growth of 0.5% per annum is not particularly high, which might explain why the company is paying out a higher proportion of earnings. This isn't necessarily bad, but we wouldn't expect rapid dividend growth in the future.

Our Thoughts On Inmobiliaria del Sur's Dividend

Even though the dividend was cut this year, we think Inmobiliaria del Sur has the ability to make consistent payments in the future. The dividend has been at reasonable levels historically, but that hasn't translated into a consistent payment. This looks like it could be a good dividend stock going forward, but we would note that the payout ratio has been at higher levels in the past so it could happen again.

Market movements attest to how highly valued a consistent dividend policy is compared to one which is more unpredictable. Still, investors need to consider a host of other factors, apart from dividend payments, when analysing a company. Just as an example, we've come across 4 warning signs for Inmobiliaria del Sur you should be aware of, and 1 of them is a bit unpleasant. Is Inmobiliaria del Sur not quite the opportunity you were looking for? Why not check out our selection of top dividend stocks.

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