Petros Petropoulos AEBE (ATH:PETRO) Has Announced That It Will Be Increasing Its Dividend To €0.30

Petros Petropoulos AEBE (ATH:PETRO) will increase its dividend on the 24th of June to €0.30, which is 178% higher than last year. This makes the dividend yield 4.7%, which is above the industry average.

View our latest analysis for Petros Petropoulos AEBE

Petros Petropoulos AEBE's Dividend Is Well Covered By Earnings

While it is great to have a strong dividend yield, we should also consider whether the payment is sustainable. Before making this announcement, Petros Petropoulos AEBE was easily earning enough to cover the dividend. As a result, a large proportion of what it earned was being reinvested back into the business.

If the trend of the last few years continues, EPS will grow by 42.5% over the next 12 months. If the dividend continues on this path, the payout ratio could be 66% by next year, which we think can be pretty sustainable going forward.

Petros Petropoulos AEBE Doesn't Have A Long Payment History

The dividend has been pretty stable looking back, but the company hasn't been paying one for very long. This makes it tough to judge how it would fare through a full economic cycle. Since 2020, the dividend has gone from €0.10 to €0.11. This works out to be a compound annual growth rate (CAGR) of approximately 4.0% a year over that time. It's good to see at least some dividend growth. Yet with a relatively short dividend paying history, we wouldn't want to depend on this dividend too heavily.

The Dividend Looks Likely To Grow

Some investors will be chomping at the bit to buy some of the company's stock based on its dividend history. Petros Petropoulos AEBE has seen EPS rising for the last five years, at 43% per annum. A low payout ratio gives the company a lot of flexibility, and growing earnings also make it very easy for it to grow the dividend.

Petros Petropoulos AEBE Looks Like A Great Dividend Stock

Overall, a dividend increase is always good, and we think that Petros Petropoulos AEBE is a strong income stock thanks to its track record and growing earnings. 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 in all, this checks a lot of the boxes we look for when choosing an income stock.

Market movements attest to how highly valued a consistent dividend policy is compared to one which is more unpredictable. However, there are other things to consider for investors when analysing stock performance. For instance, we've picked out 2 warning signs for Petros Petropoulos AEBE that investors should take into consideration. Is Petros Petropoulos AEBE not quite the opportunity you were looking for? Why not check out our selection of top dividend stocks.

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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.