Kri-Kri Milk Industry's (ATH:KRI) Dividend Will Be €0.20

Kri-Kri Milk Industry S.A. (ATH:KRI) will pay a dividend of €0.20 on the 30th of August. This payment means that the dividend yield will be 2.4%, which is around the industry average.

View our latest analysis for Kri-Kri Milk Industry

Kri-Kri Milk Industry's Dividend Is Well Covered By Earnings

We like to see a healthy dividend yield, but that is only helpful to us if the payment can continue. At the time of the last dividend payment, Kri-Kri Milk Industry was paying out a very large proportion of what it was earning and 2,472% of cash flows. Paying out such a high proportion of cash flows can expose the business to needing to cut the dividend if the business runs into some challenges.

Over the next year, EPS could expand by 3.9% if the company continues along the path it has been on recently. Assuming the dividend continues along recent trends, our estimates say the payout ratio could reach 78%, which is definitely on the higher side, but we wouldn't necessarily say this is unsustainable.

Kri-Kri Milk Industry Is Still Building Its Track Record

Kri-Kri Milk Industry's dividend has been pretty stable for a little while now, but we will continue to be cautious until it has been demonstrated for a few more years. Since 2015, the annual payment back then was €0.06, compared to the most recent full-year payment of €0.20. This means that it has been growing its distributions at 16% per annum over that time. We're not overly excited about the relatively short history of dividend payments, however the dividend is growing at a nice rate and we might take a closer look.

The Dividend's Growth Prospects Are Limited

Investors could be attracted to the stock based on the quality of its payment history. Earnings have grown at around 3.9% a year for the past five years, which isn't massive but still better than seeing them shrink. There are exceptions, but limited earnings growth and a high payout ratio can signal that a company has reached maturity. That's fine as far as it goes, but we're less enthusiastic as this often signals that the dividend is likely to grow slower in the future.

Our Thoughts On Kri-Kri Milk Industry's Dividend

Overall, we don't think this company makes a great dividend stock, even though the dividend wasn't cut this year. While Kri-Kri Milk Industry is earning enough to cover the payments, the cash flows are lacking. We would be a touch cautious of relying on this stock primarily for the dividend income.

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. To that end, Kri-Kri Milk Industry has 3 warning signs (and 1 which can't be ignored) we think you should know about. Is Kri-Kri Milk Industry 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.