Elvalhalcor Hellenic Copper and Aluminium Industry (ATH:ELHA) Is Paying Out A Larger Dividend Than Last Year

The board of Elvalhalcor Hellenic Copper and Aluminium Industry S.A. (ATH:ELHA) has announced that it will be paying its dividend of €0.0901 on the 2nd of July, an increased payment from last year's comparable dividend. Based on this payment, the dividend yield for the company will be 3.9%, which is fairly typical for the industry.

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Elvalhalcor Hellenic Copper and Aluminium Industry's Projected Earnings Seem Likely To Cover Future Distributions

We like a dividend to be consistent over the long term, so checking whether it is sustainable is important. Before making this announcement, Elvalhalcor Hellenic Copper and Aluminium Industry was easily earning enough to cover the dividend. This means that most of what the business earns is being used to help it grow.

EPS is set to fall by 6.1% over the next 12 months. If the dividend continues along the path it has been on recently, we estimate the payout ratio could be 33%, which is comfortable for the company to continue in the future.

Check out our latest analysis for Elvalhalcor Hellenic Copper and Aluminium Industry

Elvalhalcor Hellenic Copper and Aluminium Industry's Dividend Has Lacked Consistency

It's comforting to see that Elvalhalcor Hellenic Copper and Aluminium Industry has been paying a dividend for a number of years now, however it has been cut at least once in that time. This makes us cautious about the consistency of the dividend over a full economic cycle. The annual payment during the last 6 years was €0.03 in 2019, and the most recent fiscal year payment was €0.09. This implies that the company grew its distributions at a yearly rate of about 20% over that duration. Despite the rapid growth in the dividend over the past number of years, we have seen the payments go down the past as well, so that makes us cautious.

The Dividend Looks Likely To Grow

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. Elvalhalcor Hellenic Copper and Aluminium Industry has impressed us by growing EPS at 38% per year over the past five years. Earnings per share is growing at a solid clip, and the payout ratio is low which we think is an ideal combination in a dividend stock as the company can quite easily raise the dividend in the future.

Elvalhalcor Hellenic Copper and Aluminium Industry Looks Like A Great Dividend Stock

In summary, it is always positive to see the dividend being increased, and we are particularly pleased with its overall sustainability. The company is generating plenty of cash, and the earnings also quite easily cover the distributions. We should point out that the earnings are expected to fall over the next 12 months, which won't be a problem if this doesn't become a trend, but could cause some turbulence in the next year. All of these factors considered, we think this has solid potential as a dividend stock.

Investors generally tend to favour companies with a consistent, stable dividend policy as opposed to those operating an irregular one. Still, investors need to consider a host of other factors, apart from dividend payments, when analysing a company. For example, we've picked out 3 warning signs for Elvalhalcor Hellenic Copper and Aluminium Industry that investors should know about before committing capital to this stock. Looking for more high-yielding dividend ideas? Try our collection of strong dividend payers.

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