Stradim Espace Finances (EPA:ALSAS) Is Paying Out A Larger Dividend Than Last Year

Stradim Espace Finances SA (EPA:ALSAS) will increase its dividend on the 5th of September to €0.90, which is 400% higher than last year's payment from the same period of €0.18. This takes the annual payment to 3.0% of the current stock price, which unfortunately is below what the industry is paying.

We've discovered 4 warning signs about Stradim Espace Finances. View them for free.

Stradim Espace Finances' Future Dividends May Potentially Be At Risk

If it is predictable over a long period, even low dividend yields can be attractive. Before making this announcement, Stradim Espace Finances was easily earning enough to cover the dividend. This means that most of its earnings are being retained to grow the business.

If the company can't turn things around, EPS could fall by 1.4% over the next year. If the dividend continues along the path it has been on recently, the payout ratio in 12 months could be 147%, which is definitely a bit high to be sustainable going forward.

Check out our latest analysis for Stradim Espace Finances

Dividend Volatility

The company has a long dividend track record, but it doesn't look great with cuts in the past. The annual payment during the last 10 years was €0.09 in 2015, and the most recent fiscal year payment was €0.18. This works out to be a compound annual growth rate (CAGR) of approximately 7.2% a year over that time. A reasonable rate of dividend growth is good to see, but we're wary that the dividend history is not as solid as we'd like, having been cut at least once.

Stradim Espace Finances May Find It Hard To Grow The Dividend

With a relatively unstable dividend, it's even more important to see if earnings per share is growing. Stradim Espace Finances hasn't seen much change in its earnings per share over the last five years.

Our Thoughts On Stradim Espace Finances' Dividend

In summary, while it's always good to see the dividend being raised, we don't think Stradim Espace Finances' payments are rock solid. The company is generating plenty of cash, which could maintain the dividend for a while, but the track record hasn't been great. We don't think Stradim Espace Finances is a great stock to add to your portfolio if income is your focus.

Investors generally tend to favour companies with a consistent, stable dividend policy as opposed to those operating an irregular one. However, there are other things to consider for investors when analysing stock performance. Just as an example, we've come across 4 warning signs for Stradim Espace Finances you should be aware of, and 2 of them are a bit unpleasant. If you are a dividend investor, you might also want to look at our curated list of high yield dividend stocks.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.