Olvi Oyj (HEL:OLVAS) Is Paying Out A Larger Dividend Than Last Year

Olvi Oyj's (HEL:OLVAS) dividend will be increasing to €0.55 on 3rd of September. This takes the dividend yield from 2.1% to 2.1%, which shareholders will be pleased with.

View our latest analysis for Olvi Oyj

Olvi Oyj's Earnings Easily Cover the Distributions

If the payments aren't sustainable, a high yield for a few years won't matter that much. The last dividend was quite easily covered by Olvi Oyj's earnings. This indicates that a lot of the earnings are being reinvested into the business, with the aim of fueling growth.

The next year is set to see EPS grow by 23.0%. If the dividend continues along recent trends, we estimate the payout ratio will be 48%, which is in the range that makes us comfortable with the sustainability of the dividend.

Olvi Oyj Has A Solid Track Record

The company has been paying a dividend for a long time, and it has been quite stable which gives us confidence in the future dividend potential. The dividend has gone from €0.50 in 2011 to the most recent annual payment of €1.10. This works out to be a compound annual growth rate (CAGR) of approximately 8.2% a year over that time. The growth of the dividend has been pretty reliable, so we think this can offer investors some nice additional income in their portfolio.

The Dividend Looks Likely To Grow

Investors who have held shares in the company for the past few years will be happy with the dividend income they have received. It's encouraging to see Olvi Oyj has been growing its earnings per share at 12% a year over the past five years. Earnings are on the uptrend, and it is only paying a small portion of those earnings to shareholders.

We Really Like Olvi Oyj's Dividend

Overall, we think this could be an attractive income stock, and it is only getting better by paying a higher dividend this year. 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. However, there are other things to consider for investors when analysing stock performance. Now, if you want to look closer, it would be worth checking out our free research on Olvi Oyj management tenure, salary, and performance. Looking for more high-yielding dividend ideas? Try our curated list of strong dividend payers.

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