Wulff-Yhtiöt Oyj (HEL:WUF1V) Will Pay A Larger Dividend Than Last Year At €0.07

Wulff-Yhtiöt Oyj's (HEL:WUF1V) periodic dividend will be increasing on the 20th of October to €0.07, with investors receiving 7.7% more than last year's €0.065. This will take the annual payment to 4.2% of the stock price, which is above what most companies in the industry pay.

Check out our latest analysis for Wulff-Yhtiöt Oyj

Wulff-Yhtiöt Oyj's Dividend Is Well Covered By Earnings

If the payments aren't sustainable, a high yield for a few years won't matter that much. However, based ont he last payment, Wulff-Yhtiöt Oyj was earning enough to cover the dividend pretty comfortably. The business is earning enough to make the dividend feasible, but the cash payout ratio of 76% shows that most of the cash is going back to the shareholders, which could constrain growth prospects going forward.

Over the next year, EPS is forecast to fall by 1.0%. If the dividend continues along the path it has been on recently, we estimate the payout ratio could be 32%, which is comfortable for the company to continue in the future.

Dividend Volatility

Although the company has a long dividend history, it has been cut at least once in the last 10 years. The dividend has gone from an annual total of €0.08 in 2013 to the most recent total annual payment of €0.14. This implies that the company grew its distributions at a yearly rate of about 5.8% over that duration. We have seen cuts in the past, so while the growth looks promising we would be a little bit cautious about its track record.

The Dividend Looks Likely To Grow

With a relatively unstable dividend, it's even more important to see if earnings per share is growing. We are encouraged to see that Wulff-Yhtiöt Oyj has grown earnings per share at 41% per year over the past five years. Earnings have been growing rapidly, and with a low payout ratio we think that the company could turn out to be a great dividend stock.

Our Thoughts On Wulff-Yhtiöt Oyj's Dividend

Overall, we always like to see the dividend being raised, but we don't think Wulff-Yhtiöt Oyj will make a great income stock. The low payout ratio is a redeeming feature, but generally we are not too happy with the payments Wulff-Yhtiöt Oyj has been making. We don't think Wulff-Yhtiöt Oyj is a great stock to add to your portfolio if income is your focus.

Market movements attest to how highly valued a consistent dividend policy is compared to one which is more unpredictable. At the same time, there are other factors our readers should be conscious of before pouring capital into a stock. For instance, we've picked out 3 warning signs for Wulff-Yhtiöt Oyj that investors should take into consideration. Is Wulff-Yhtiöt 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.