Vaisala Oyj (HEL:VAIAS) Has Announced That It Will Be Increasing Its Dividend To €0.68

By
Simply Wall St
Published
February 21, 2022
HLSE:VAIAS
Source: Shutterstock

Vaisala Oyj (HEL:VAIAS) will increase its dividend on the 11th of April to €0.68. This makes the dividend yield about the same as the industry average at 1.6%.

See our latest analysis for Vaisala Oyj

Vaisala Oyj's Payment Has Solid Earnings Coverage

We like to see a healthy dividend yield, but that is only helpful to us if the payment can continue. The last dividend was quite easily covered by Vaisala Oyj's earnings. This means that a large portion of its earnings are being retained to grow the business.

The next year is set to see EPS grow by 18.4%. Assuming the dividend continues along recent trends, we think the payout ratio could be 56% by next year, which is in a pretty sustainable range.

historic-dividend
HLSE:VAIAS Historic Dividend February 21st 2022

Vaisala Oyj Has A Solid Track Record

The company has a sustained record of paying dividends with very little fluctuation. The dividend has gone from €0.33 in 2012 to the most recent annual payment of €0.68. This means that it has been growing its distributions at 7.7% per annum over that time. Dividends have grown at a reasonable rate over this period, and without any major cuts in the payment over time, we think this is an attractive combination as it provides a nice boost to shareholder returns.

The Dividend Looks Likely To Grow

The company's investors will be pleased to have been receiving dividend income for some time. It's encouraging to see Vaisala Oyj has been growing its earnings per share at 16% a year over the past five years. Since earnings per share is growing at an acceptable rate, and the payout policy is balanced, we think the company is positioning itself well to grow earnings and dividends in the future.

We Really Like Vaisala 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. Distributions are quite easily covered by earnings, which are also being converted to cash flows. All of these factors considered, we think this has solid potential as a dividend stock.

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. Taking the debate a bit further, we've identified 1 warning sign for Vaisala Oyj that investors need to be conscious of moving forward. Looking for more high-yielding dividend ideas? Try our collection of strong dividend payers.

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