CapMan Oyj (HEL:CAPMAN) Is Increasing Its Dividend To €0.08

The board of CapMan Oyj (HEL:CAPMAN) has announced that it will be paying its dividend of €0.08 on the 22nd of September, an increased payment from last year's comparable dividend. Based on this payment, the dividend yield for the company will be 6.6%, which is fairly typical for the industry.

Check out our latest analysis for CapMan Oyj

CapMan Oyj's Dividend Is Well Covered By Earnings

Solid dividend yields are great, but they only really help us if the payment is sustainable. Based on the last payment, the company wasn't making enough to cover what it was paying to shareholders. It will be difficult to sustain this level of payout so we wouldn't be confident about this continuing.

Earnings per share is forecast to rise by 48.0% over the next year. If recent patterns in the dividend continues, the payout ratio in 12 months could be 77% which is a bit high but can definitely be sustainable.

CapMan Oyj Is Still Building Its Track Record

It is great to see that CapMan Oyj has been paying a stable dividend for a number of years now, however we want to be a bit cautious about whether this will remain true through a full economic cycle. The annual payment during the last 9 years was €0.04 in 2014, and the most recent fiscal year payment was €0.17. This works out to be a compound annual growth rate (CAGR) of approximately 17% a year over that time. We're not overly excited about the relatively short history of dividend payments, however the dividend is growing at a nice rate and we might take a closer look.

CapMan Oyj Might Find It Hard To Grow Its Dividend

The company's investors will be pleased to have been receiving dividend income for some time. CapMan Oyj has impressed us by growing EPS at 21% per year over the past five years. Strong earnings is nice to see, but unless this can be sustained on minimal reinvestment of profits, we would question whether dividends will follow suit.

CapMan Oyj's Dividend Doesn't Look Sustainable

Overall, this is probably not a great income stock, even though the dividend is being raised at the moment. In general, the distributions are a little bit higher than we would like, but we can't ignore the fact the quickly growing earnings gives this stock great potential in the future. Overall, we don't think this company has the makings of a good income stock.

Companies possessing a stable dividend policy will likely enjoy greater investor interest than those suffering from a more inconsistent approach. Still, investors need to consider a host of other factors, apart from dividend payments, when analysing a company. Case in point: We've spotted 4 warning signs for CapMan Oyj (of which 1 doesn't sit too well with us!) you should know about. Looking for more high-yielding dividend ideas? Try our collection of strong dividend payers.

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