Frenkel Topping Group (LON:FEN) Will Pay A Dividend Of £0.0138

Frenkel Topping Group Plc (LON:FEN) will pay a dividend of £0.0138 on the 17th of October. This means the dividend yield will be fairly typical at 3.0%.

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Frenkel Topping Group's Payment Could Potentially Have Solid Earnings Coverage

Unless the payments are sustainable, the dividend yield doesn't mean too much. Prior to this announcement, Frenkel Topping Group's dividend was comfortably covered by both cash flow and earnings. This indicates that quite a large proportion of earnings is being invested back into the business.

Over the next year, EPS could expand by 12.7% if recent trends continue. If the dividend continues on this path, the payout ratio could be 56% by next year, which we think can be pretty sustainable going forward.

Check out our latest analysis for Frenkel Topping Group

Frenkel Topping Group Has A Solid Track Record

Even over a long history of paying dividends, the company's distributions have been remarkably stable. Since 2015, the dividend has gone from £0.0108 total annually to £0.0138. This works out to be a compound annual growth rate (CAGR) of approximately 2.4% a year over that time. Although we can't deny that the dividend has been remarkably stable in the past, the growth has been pretty muted.

The Dividend Looks Likely To Grow

Investors could be attracted to the stock based on the quality of its payment history. Frenkel Topping Group has seen EPS rising for the last five years, at 13% per annum. Shareholders are getting plenty of the earnings returned to them, which combined with strong growth makes this quite appealing.

Frenkel Topping Group Looks Like A Great Dividend Stock

Overall, we like to see the dividend staying consistent, and we think Frenkel Topping Group might even raise payments in the future. The company is easily earning enough to cover its dividend payments and it is great to see that these earnings are being translated into cash flow. All of these factors considered, we think this has solid potential as a dividend stock.

Companies possessing a stable dividend policy will likely enjoy greater investor interest than those suffering from a more inconsistent approach. However, there are other things to consider for investors when analysing stock performance. For instance, we've picked out 2 warning signs for Frenkel Topping Group that investors should take into consideration. 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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