HELLENiQ ENERGY Holdings (ATH:ELPE) Is Paying Out A Dividend Of €0.20

HELLENiQ ENERGY Holdings S.A. (ATH:ELPE) has announced that it will pay a dividend of €0.20 per share on the 26th of January. This means the dividend yield will be fairly typical at 5.4%.

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HELLENiQ ENERGY Holdings' Projections Indicate Future Payments May Be Unsustainable

Estimates Indicate HELLENiQ ENERGY Holdings' Could Struggle to Maintain Dividend Payments In The Future

HELLENiQ ENERGY Holdings' Future Dividends May Potentially Be At Risk

Solid dividend yields are great, but they only really help us if the payment is sustainable. Despite not generating a profit, HELLENiQ ENERGY Holdings is still paying a dividend. Along with this, it is also not generating free cash flows, which raises concerns about the sustainability of the dividend.

EPS is forecast to rise very quickly over the next 12 months. If recent patterns in the dividend continues, we would start to get a bit worried, with the payout ratio possibly reaching 129%.

View our latest analysis for HELLENiQ ENERGY Holdings

HELLENiQ ENERGY Holdings' Dividend Has Lacked Consistency

Looking back, HELLENiQ ENERGY Holdings' dividend hasn't been particularly consistent. This suggests that the dividend might not be the most reliable. The dividend has gone from an annual total of €0.20 in 2016 to the most recent total annual payment of €0.45. This means that it has been growing its distributions at 9.4% per annum over that time. It's good to see the dividend growing at a decent rate, but the dividend has been cut at least once in the past. HELLENiQ ENERGY Holdings might have put its house in order since then, but we remain cautious.

The Company Could Face Some Challenges Growing The Dividend

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. HELLENiQ ENERGY Holdings has impressed us by growing EPS at 10% per year over the past five years. Unprofitable companies aren't normally our pick for a dividend stock, but we like the growth that we have been seeing. Assuming the company can post positive net income numbers soon, it could has the potential to be a decent dividend payer.

The Dividend Could Prove To Be Unreliable

Overall, it's nice to see a consistent dividend payment, but we think that longer term, the current level of payment might be unsustainable. 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. We would probably look elsewhere for an income investment.

Companies possessing a stable dividend policy will likely enjoy greater investor interest than those suffering from a more inconsistent approach. At the same time, there are other factors our readers should be conscious of before pouring capital into a stock. For instance, we've picked out 2 warning signs for HELLENiQ ENERGY Holdings that investors should take into consideration. Is HELLENiQ ENERGY Holdings 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.