Elvalhalcor Hellenic Copper and Aluminium Industry's (ATH:ELHA) Shareholders Will Receive A Bigger Dividend Than Last Year

Elvalhalcor Hellenic Copper and Aluminium Industry S.A. (ATH:ELHA) has announced that it will be increasing its periodic dividend on the 2nd of July to €0.09, which will be 125% higher than last year's comparable payment amount of €0.04. This takes the annual payment to 1.9% of the current stock price, which unfortunately is below what the industry is paying.

See our latest analysis for Elvalhalcor Hellenic Copper and Aluminium Industry

Elvalhalcor Hellenic Copper and Aluminium Industry's Future Dividend Projections Appear Well Covered By Earnings

Even a low dividend yield can be attractive if it is sustained for years on end. However, prior to this announcement, Elvalhalcor Hellenic Copper and Aluminium Industry's dividend was comfortably covered by both cash flow and earnings. This means that most of what the business earns is being used to help it grow.

Over the next year, EPS is forecast to expand by 14.6%. Assuming the dividend continues along recent trends, we think the payout ratio could be 33% by next year, which is in a pretty sustainable range.

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 suggests that the dividend might not be the most reliable. The dividend has gone from an annual total of €0.03 in 2019 to the most recent total annual payment of €0.04. This implies that the company grew its distributions at a yearly rate of about 4.9% over that duration. Modest growth in the dividend is good to see, but we think this is offset by historical cuts to the payments. It is hard to live on a dividend income if the company's earnings are not consistent.

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 seen EPS rising for the last five years, at 20% per annum. Rapid earnings growth and a low payout ratio suggest this company has been effectively reinvesting in its business. Should that continue, this company could have a bright future.

We Really Like Elvalhalcor Hellenic Copper and Aluminium Industry's Dividend

In summary, it is always positive to see the dividend being increased, and we are particularly pleased with its overall sustainability. Earnings are easily covering distributions, and the company is generating plenty of cash. Taking this all into consideration, this looks like it could be a good dividend opportunity.

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. For example, we've picked out 2 warning signs for Elvalhalcor Hellenic Copper and Aluminium Industry that investors should know about before committing capital to this stock. Is Elvalhalcor Hellenic Copper and Aluminium Industry not quite the opportunity you were looking for? Why not check out our selection of top dividend stocks.

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