Ålandsbanken Abp (HEL:ALBAV) Is Paying Out A Larger Dividend Than Last Year

Ålandsbanken Abp (HEL:ALBAV) has announced that it will be increasing its dividend from last year's comparable payment on the 11th of April to €2.05. This will take the annual payment to 5.3% of the stock price, which is above what most companies in the industry pay.

See our latest analysis for Ålandsbanken Abp

Ålandsbanken Abp's Earnings Will Easily Cover The Distributions

If the payments aren't sustainable, a high yield for a few years won't matter that much.

Having distributed dividends for at least 10 years, Ålandsbanken Abp has a long history of paying out a part of its earnings to shareholders. Taking data from its last earnings report, calculating for the company's payout ratio shows 68%, which means that Ålandsbanken Abp would be able to pay its last dividend without pressure on the balance sheet.

Earnings per share could rise by 12.3% over the next year if things go the same way as they have for the last few years. If recent patterns in the dividend continue, the payout ratio in 12 months could be 89% which is a bit high but can definitely be sustainable.

Ålandsbanken Abp Has A Solid Track Record

The company has an extended history of paying stable dividends. The annual payment during the last 10 years was €0.15 in 2013, and the most recent fiscal year payment was €2.05. This means that it has been growing its distributions at 30% per annum over that time. Rapidly growing dividends for a long time is a very valuable feature for an income stock.

The Dividend Looks Likely To Grow

The company's investors will be pleased to have been receiving dividend income for some time. Ålandsbanken Abp has seen EPS rising for the last five years, at 12% per annum. The company is paying a reasonable amount of earnings to shareholders, and is growing earnings at a decent rate so we think it could be a decent dividend stock.

Our Thoughts On Ålandsbanken Abp's Dividend

Overall, it's great to see the dividend being raised and that it is still in a sustainable range. While the payout ratio is a bit high, the strong earnings growth could set Ålandsbanken Abp on the path to become a strong dividend payer in the future. The payment isn't stellar, but it could make a decent addition to a dividend portfolio.

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 picked out 1 warning sign for Ålandsbanken Abp 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.