As Commercial Industrial Company of Computers and Toys (ATH:ASCO) Will Pay A Larger Dividend Than Last Year At €0.17

As Commercial Industrial Company of Computers and Toys S.A. (ATH:ASCO) has announced that it will be increasing its dividend from last year's comparable payment on the 16th of July to €0.17. This will take the dividend yield to an attractive 4.0%, providing a nice boost to shareholder returns.

We've discovered 2 warning signs about As Commercial Industrial Company of Computers and Toys. View them for free.

As Commercial Industrial Company of Computers and Toys' Payment Could Potentially Have Solid Earnings Coverage

While it is great to have a strong dividend yield, we should also consider whether the payment is sustainable. The last dividend was quite easily covered by As Commercial Industrial Company of Computers and Toys' earnings. This indicates that a lot of the earnings are being reinvested into the business, with the aim of fueling growth.

If the trend of the last few years continues, EPS will grow by 6.5% over the next 12 months. If the dividend continues on this path, the payout ratio could be 74% by next year, which we think can be pretty sustainable going forward.

View our latest analysis for As Commercial Industrial Company of Computers and Toys

As Commercial Industrial Company of Computers and Toys' Dividend Has Lacked Consistency

As Commercial Industrial Company of Computers and Toys has been paying dividends for a while, but the track record isn't stellar. This suggests that the dividend might not be the most reliable. Since 2016, the dividend has gone from €0.06 total annually to €0.138. This implies that the company grew its distributions at a yearly rate of about 9.7% over that duration. We have seen cuts in the past, so while the growth looks promising we would be a little bit cautious about its track record.

We Could See As Commercial Industrial Company of Computers and Toys' Dividend Growing

With a relatively unstable dividend, it's even more important to evaluate if earnings per share is growing, which could point to a growing dividend in the future. As Commercial Industrial Company of Computers and Toys has seen EPS rising for the last five years, at 6.5% per annum. The company is paying a reasonable amount of earnings to shareholders, and is growing earnings at a decent rate so we think it could be a decent dividend stock.

Our Thoughts On As Commercial Industrial Company of Computers and Toys' Dividend

Overall, this is a reasonable dividend, and it being raised is an added bonus. The payout ratio looks good, but unfortunately the company's dividend track record isn't stellar. The payment isn't stellar, but it could make a decent addition to a dividend portfolio.

Market movements attest to how highly valued a consistent dividend policy is compared to one which is more unpredictable. Meanwhile, despite the importance of dividend payments, they are not the only factors our readers should know when assessing a company. Taking the debate a bit further, we've identified 2 warning signs for As Commercial Industrial Company of Computers and Toys that investors need to be conscious of moving forward. 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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