Tokmanni Group Oyj's (HEL:TOKMAN) Dividend Will Be Increased To €0.96

Tokmanni Group Oyj's (HEL:TOKMAN) dividend will be increasing on the 8th of April to €0.96, with investors receiving 13% more than last year. This will take the dividend yield from 4.7% to 5.4%, providing a nice boost to shareholder returns.

View our latest analysis for Tokmanni Group Oyj

Tokmanni Group Oyj's Earnings Easily Cover the Distributions

While it is great to have a strong dividend yield, we should also consider whether the payment is sustainable. Based on the last payment, Tokmanni Group Oyj was quite comfortably earning enough to cover the dividend. This indicates that a lot of the earnings are being reinvested into the business, with the aim of fueling growth.

Earnings per share is forecast to rise by 0.8% over the next year. If recent patterns in the dividend continues, the payout ratio in 12 months could be 82% which is a bit high but can definitely be sustainable.

Tokmanni Group Oyj Is Still Building Its Track Record

Tokmanni Group Oyj's dividend has been pretty stable for a little while now, but we will continue to be cautious until it has been demonstrated for a few more years. Since 2017, the first annual payment was €0.41, compared to the most recent full-year payment of €0.85. This works out to be a compound annual growth rate (CAGR) of approximately 16% a year over that time. It is always nice to see strong dividend growth, but with such a short payment history we wouldn't be inclined to rely on it until a longer track record can be developed.

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. Tokmanni Group Oyj has seen EPS rising for the last five years, at 24% per annum. The company's earnings per share has grown rapidly in recent years, and it has a good balance between reinvesting and paying dividends to shareholders, so we think that Tokmanni Group Oyj could prove to be a strong dividend payer.

Tokmanni Group Oyj Looks Like A Great Dividend Stock

In summary, it is always positive to see the dividend being increased, and we are particularly pleased with its overall sustainability. Earnings are easily covering distributions, and the company is generating plenty of cash. All in all, this checks a lot of the boxes we look for when choosing an income stock.

Investors generally tend to favour companies with a consistent, stable dividend policy as opposed to those operating an irregular one. Meanwhile, despite the importance of dividend payments, they are not the only factors our readers should know when assessing a company. As an example, we've identified 2 warning signs for Tokmanni Group Oyj that you should be aware of before investing. We have also put together a list of global stocks with a solid dividend.

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