TietoEVRY Oyj (HEL:TIETO) Is Due To Pay A Dividend Of €0.75

TietoEVRY Oyj's (HEL:TIETO) investors are due to receive a payment of €0.75 per share on 2nd of October. This makes the dividend yield 9.9%, which is above the industry average.

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TietoEVRY Oyj's Projections Indicate Future Payments May Be Unsustainable

Estimates Indicate TietoEVRY Oyj's Could Struggle to Maintain Dividend Payments In The Future

TietoEVRY Oyj's Future Dividends May Potentially Be At Risk

Impressive dividend yields are good, but this doesn't matter much if the payments can't be sustained. TietoEVRY Oyj is not generating a profit, but its free cash flows easily cover the dividend, leaving plenty for reinvestment in the business. In general, cash flows are more important than the more traditional measures of profit so we feel pretty comfortable with the dividend at this level.

Earnings per share is forecast to rise exponentially over the next year. Assuming the dividend continues along recent trends, we could see the payout ratio reach 148%, which is on the unsustainable side.

See our latest analysis for TietoEVRY Oyj

Dividend Volatility

Although the company has a long dividend history, it has been cut at least once in the last 10 years. Since 2015, the annual payment back then was €1.00, compared to the most recent full-year payment of €1.50. This means that it has been growing its distributions at 4.1% per annum over that time. The dividend has seen some fluctuations in the past, so even though the dividend was raised this year, we should remember that it has been cut in the past.

Dividend Growth May Be Hard To Achieve

With a relatively unstable dividend, it's even more important to evaluate if earnings per share is growing, which could point to a growing dividend in the future. TietoEVRY Oyj hasn't seen much change in its earnings per share over the last five years. TietoEVRY Oyj isn't actually turning a profit, which makes it much harder for us to see how they can grow dividends.

Our Thoughts On TietoEVRY Oyj's Dividend

Overall, this is probably not a great income stock, even though the dividend is being raised at the moment. In the past, the payments have been unstable, but over the short term the dividend could be reliable, with the company generating enough cash to cover it. We don't think TietoEVRY 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. Still, investors need to consider a host of other factors, apart from dividend payments, when analysing a company. For example, we've picked out 2 warning signs for TietoEVRY Oyj that investors should know about before committing capital to this stock. Looking for more high-yielding dividend ideas? Try our collection of strong dividend payers.

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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.