EURO Ressources (EPA:EUR) Is Due To Pay A Dividend Of €0.25

EURO Ressources S.A. (EPA:EUR) will pay a dividend of €0.25 on the 8th of June. The dividend yield will be 8.4% based on this payment which is still above the industry average.

View our latest analysis for EURO Ressources

EURO Ressources Is Paying Out More Than It Is Earning

A big dividend yield for a few years doesn't mean much if it can't be sustained. Based on the last payment, the company wasn't making enough to cover what it was paying to shareholders. It will be difficult to sustain this level of payout so we wouldn't be confident about this continuing.

Looking forward, EPS could fall by 9.5% if the company can't turn things around from the last few years. If the dividend continues along the path it has been on recently, the payout ratio in 12 months could be 165%, which is definitely a bit high to be sustainable going forward.

Dividend Volatility

While the company has been paying a dividend for a long time, it has cut the dividend at least once in the last 10 years. Since 2013, the annual payment back then was €0.29, compared to the most recent full-year payment of €0.25. This works out to be a decline of approximately 1.5% per year over that time. Declining dividends isn't generally what we look for as they can indicate that the company is running into some challenges.

Dividend Growth May Be Hard To Come By

With a relatively unstable dividend, it's even more important to see if earnings per share is growing. Over the past five years, it looks as though EURO Ressources' EPS has declined at around 9.5% a year. If the company is making less over time, it naturally follows that it will also have to pay out less in dividends.

We're Not Big Fans Of EURO Ressources' Dividend

Overall, while some might be pleased that the dividend wasn't cut, we think this may help EURO Ressources make more consistent payments in the future. The company's earnings aren't high enough to be making such big distributions, and it isn't backed up by strong growth or consistency either. Overall, this doesn't get us very excited from an income standpoint.

Companies possessing a stable dividend policy will likely enjoy greater investor interest than those suffering from a more inconsistent approach. Meanwhile, despite the importance of dividend payments, they are not the only factors our readers should know when assessing a company. To that end, EURO Ressources has 3 warning signs (and 2 which shouldn't be ignored) we think you should know about. 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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