Wärtsilä Oyj Abp (HEL:WRT1V) Will Pay A Dividend Of €0.22

The board of Wärtsilä Oyj Abp (HEL:WRT1V) has announced that it will pay a dividend on the 24th of September, with investors receiving €0.22 per share. Based on this payment, the dividend yield for the company will be 2.9%, which is fairly typical for the industry.

Our free stock report includes 1 warning sign investors should be aware of before investing in Wärtsilä Oyj Abp. Read for free now.

Wärtsilä Oyj Abp's Future Dividend Projections Appear Well Covered By Earnings

While it is always good to see a solid dividend yield, we should also consider whether the payment is feasible. Prior to this announcement, Wärtsilä Oyj Abp's dividend was comfortably covered by both cash flow and earnings. This indicates that a lot of the earnings are being reinvested into the business, with the aim of fueling growth.

Looking forward, earnings per share is forecast to rise by 35.7% over the next year. Assuming the dividend continues along recent trends, we think the payout ratio could be 36% by next year, which is in a pretty sustainable range.

View our latest analysis for Wärtsilä Oyj Abp

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 €0.383 in 2015, and the most recent fiscal year payment was €0.44. This implies that the company grew its distributions at a yearly rate of about 1.4% over that duration. The dividend has seen some fluctuations in the past, so even though the dividend was raised this year, we should remember that it has been cut in the past.

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. Wärtsilä Oyj Abp has seen EPS rising for the last five years, at 18% per annum. Shareholders are getting plenty of the earnings returned to them, which combined with strong growth makes this quite appealing.

Wärtsilä Oyj Abp Looks Like A Great Dividend Stock

Overall, a dividend increase is always good, and we think that Wärtsilä Oyj Abp is a strong income stock thanks to its track record and growing earnings. 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.

Investors generally tend to favour companies with a consistent, stable dividend policy as opposed to those operating an irregular one. Still, investors need to consider a host of other factors, apart from dividend payments, when analysing a company. For example, we've picked out 1 warning sign for Wärtsilä Oyj 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.

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