Groupe Guillin (EPA:ALGIL) Has Announced That Its Dividend Will Be Reduced To €1.00

The board of Groupe Guillin S.A. (EPA:ALGIL) has announced it will be reducing its dividend by 9.1% from last year's payment of €1.10 on the 26th of June, with shareholders receiving €1.00. The yield is still above the industry average at 4.1%.

We've discovered 1 warning sign about Groupe Guillin. View them for free.

Groupe Guillin's Projected Earnings Seem Likely To Cover Future Distributions

A big dividend yield for a few years doesn't mean much if it can't be sustained. However, Groupe Guillin's earnings easily cover the dividend. This means that most of what the business earns is being used to help it grow.

Over the next year, EPS is forecast to expand by 11.0%. Assuming the dividend continues along recent trends, we think the payout ratio could be 31% by next year, which is in a pretty sustainable range.

Check out our latest analysis for Groupe Guillin

Dividend Volatility

The company's dividend history has been marked by instability, with at least one cut in the last 10 years. Since 2015, the annual payment back then was €0.20, compared to the most recent full-year payment of €1.10. This means that it has been growing its distributions at 19% per annum over that time. It is great to see strong growth in the dividend payments, but cuts are concerning as it may indicate the payout policy is too ambitious.

Groupe Guillin Could Grow Its Dividend

With a relatively unstable dividend, it's even more important to see if earnings per share is growing. We are encouraged to see that Groupe Guillin has grown earnings per share at 5.5% per year over the past five years. With a decent amount of growth and a low payout ratio, we think this bodes well for Groupe Guillin's prospects of growing its dividend payments in the future.

Our Thoughts On Groupe Guillin's Dividend

Even though the dividend was cut this year, we think Groupe Guillin has the ability to make consistent payments in the future. While the payout ratios are a good sign, we are less enthusiastic about the company's dividend record. The payment isn't stellar, but it could make a decent addition to a dividend portfolio.

It's important to note that companies having a consistent dividend policy will generate greater investor confidence than those having an erratic one. Still, investors need to consider a host of other factors, apart from dividend payments, when analysing a company. For example, we've picked out 1 warning sign for Groupe Guillin that investors should know about before committing capital to this stock. If you are a dividend investor, you might also want to look at our curated list of high yield 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.