abrdn European Logistics Income (LON:ASLI) Is Paying Out A Dividend Of €0.0122

abrdn European Logistics Income plc's (LON:ASLI) investors are due to receive a payment of €0.0122 per share on 22nd of September. This makes the dividend yield 6.9%, which will augment investor returns quite nicely.

Check out our latest analysis for abrdn European Logistics Income

abrdn European Logistics Income Might Find It Hard To Continue The Dividend

A big dividend yield for a few years doesn't mean much if it can't be sustained. abrdn European Logistics Income is unprofitable despite paying a dividend, and it is paying out 104% of its free cash flow. These payout levels would generally be quite difficult to keep up.

Looking forward, earnings per share could rise by 9.1% over the next year if the trend from the last few years continues. This is the right direction to be moving, but it is probably not enough to achieve profitability. Unless this can be done in short order, the dividend might be difficult to sustain.

abrdn European Logistics Income's Dividend Has Lacked Consistency

Even in its relatively short history, the company has reduced the dividend at least once. Due to this, we are a little bit cautious about the dividend consistency over a full economic cycle. Since 2018, the dividend has gone from €0.0311 total annually to €0.0564. This works out to be a compound annual growth rate (CAGR) of approximately 13% a year 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.

We Could See abrdn European Logistics Income's Dividend Growing

Given that the dividend has been cut in the past, we need to check if earnings are growing and if that might lead to stronger dividends in the future. It's encouraging to see that abrdn European Logistics Income has been growing its earnings per share at 9.1% a year over the past five years. It's not great that the company is not turning a profit, but the decent growth in recent years is certainly a positive sign. All is not lost, but the future of the dividend definitely rests upon the company's ability to become profitable soon.

abrdn European Logistics Income's Dividend Doesn't Look Sustainable

In summary, while it's good to see that the dividend hasn't been cut, we are a bit cautious about abrdn European Logistics Income's payments, as there could be some issues with sustaining them into the future. While we generally think the level of distributions are a bit high, we wouldn't rule it out as becoming a good dividend payer in the future as its earnings are growing healthily. This company is not in the top tier of income providing stocks.

Market movements attest to how highly valued a consistent dividend policy is compared to one which is more unpredictable. Still, investors need to consider a host of other factors, apart from dividend payments, when analysing a company. As an example, we've identified 2 warning signs for abrdn European Logistics Income that you should be aware of before investing. Looking for more high-yielding dividend ideas? Try our collection of strong dividend payers.

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