Métropole Télévision (EPA:MMT) Is Increasing Its Dividend To €1.25

The board of Métropole Télévision S.A. (EPA:MMT) has announced that it will be paying its dividend of €1.25 on the 3rd of May, an increased payment from last year's comparable dividend. This makes the dividend yield 9.2%, which is above the industry average.

Check out our latest analysis for Métropole Télévision

Métropole Télévision's Earnings Easily Cover The Distributions

A big dividend yield for a few years doesn't mean much if it can't be sustained. The last dividend was quite easily covered by Métropole Télévision's earnings. This indicates that quite a large proportion of earnings is being invested back into the business.

Looking forward, earnings per share is forecast to fall by 7.0% over the next year. If recent patterns in the dividend continue, we could see the payout ratio reaching 75% in the next 12 months, which is on the higher end of the range we would say is sustainable.

Dividend Volatility

The company's dividend history has been marked by instability, with at least one cut in the last 10 years. Since 2014, the dividend has gone from €0.85 total annually to €1.25. This works out to be a compound annual growth rate (CAGR) of approximately 3.9% a year over that time. We're glad to see the dividend has risen, but with a limited rate of growth and fluctuations in the payments the total shareholder return may be limited.

We Could See Métropole Télévision's Dividend Growing

Growing earnings per share could be a mitigating factor when considering the past fluctuations in the dividend. It's encouraging to see that Métropole Télévision has been growing its earnings per share at 6.1% 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.

In Summary

In summary, it's great to see that the company can raise the dividend and keep it in a sustainable range. While the payout ratios are a good sign, we are less enthusiastic about the company's dividend record. This looks like it could be a good dividend stock going forward, but we would note that the payout ratio has been at higher levels in the past so it could happen again.

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. Case in point: We've spotted 2 warning signs for Métropole Télévision (of which 1 can't be ignored!) 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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