Bank of Greece (ATH:TELL) Has Announced A Dividend Of €0.672

Bank of Greece (ATH:TELL) will pay a dividend of €0.672 on the 30th of April. This means the annual payment is 4.5% of the current stock price, which is above the average for the industry.

See our latest analysis for Bank of Greece

Bank of Greece's Earnings Will Easily Cover The Distributions

Impressive dividend yields are good, but this doesn't matter much if the payments can't be sustained.

Bank of Greece has a long history of paying out dividends, with its current track record at a minimum of 10 years. Using data from its latest earnings report, Bank of Greece's payout ratio sits at 14%, an extremely comfortable number that shows that it can pay its dividend.

Unless the company can turn things around, EPS could fall by 31.6% over the next year. Assuming the dividend continues along recent trends, we believe the future payout ratio could be 20%, which we are pretty comfortable with and we think is feasible on an earnings basis.

Bank of Greece Has A Solid Track Record

Even over a long history of paying dividends, the company's distributions have been remarkably stable. The most recent annual payment of €0.672 is about the same as the annual payment 10 years ago. While the consistency in the dividend payments is impressive, we think the relatively slow rate of growth is less attractive.

The Dividend Has Limited Growth Potential

Some investors will be chomping at the bit to buy some of the company's stock based on its dividend history. However, initial appearances might be deceiving. Bank of Greece's earnings per share has shrunk at 32% a year over the past five years. Such rapid declines definitely have the potential to constrain dividend payments if the trend continues into the future.

Our Thoughts On Bank of Greece's Dividend

In summary, we are pleased with the dividend remaining consistent, and we think there is a good chance of this continuing in the future. While the payments look sustainable for now, earnings have been shrinking so the dividend could come under pressure in the future. The payment isn't stellar, but it could make a decent addition to a dividend portfolio.

Companies possessing a stable dividend policy will likely enjoy greater investor interest than those suffering from a more inconsistent approach. Meanwhile, despite the importance of dividend payments, they are not the only factors our readers should know when assessing a company. For example, we've identified 4 warning signs for Bank of Greece (1 is potentially serious!) 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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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.