NoHo Partners Oyj's (HEL:NOHO) Dividend Will Be Increased To €0.16

The board of NoHo Partners Oyj (HEL:NOHO) has announced that it will be paying its dividend of €0.16 on the 13th of November, an increased payment from last year's comparable dividend. This makes the dividend yield 5.2%, which is above the industry average.

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NoHo Partners Oyj's Future Dividend Projections Appear Well Covered By Earnings

While it is great to have a strong dividend yield, we should also consider whether the payment is sustainable. The last payment made up 74% of earnings, but cash flows were much higher. Since the dividend is just paying out cash to shareholders, we care more about the cash payout ratio from which we can see plenty is being left over for reinvestment in the business.

Looking forward, earnings per share is forecast to rise by 50.2% over the next year. Assuming the dividend continues along recent trends, we think the payout ratio could be 53% by next year, which is in a pretty sustainable range.

Check out our latest analysis for NoHo Partners Oyj

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 dividend has gone from an annual total of €0.22 in 2015 to the most recent total annual payment of €0.46. This works out to be a compound annual growth rate (CAGR) of approximately 7.7% a year over that time. A reasonable rate of dividend growth is good to see, but we're wary that the dividend history is not as solid as we'd like, having been cut at least once.

The Dividend Looks Likely To Grow

Growing earnings per share could be a mitigating factor when considering the past fluctuations in the dividend. It's encouraging to see that NoHo Partners Oyj has been growing its earnings per share at 68% a year over the past five years. Fast growing earnings are great, but this can rarely be sustained without some reinvestment into the business, which NoHo Partners Oyj hasn't been doing.

We Really Like NoHo Partners Oyj's Dividend

Overall, a dividend increase is always good, and we think that NoHo Partners Oyj is a strong income stock thanks to its track record and growing earnings. Earnings are easily covering distributions, and the company is generating plenty of cash. All of these factors considered, we think this has solid potential as a dividend stock.

Investors generally tend to favour companies with a consistent, stable dividend policy as opposed to those operating an irregular one. 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 3 warning signs for NoHo Partners Oyj (2 are potentially serious!) that you should be aware of before investing. Is NoHo Partners Oyj not quite the opportunity you were looking for? Why not check out our selection of top dividend stocks.

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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.