Fourlis Holdings (ATH:FOYRK) Is Increasing Its Dividend To €0.12

Fourlis Holdings S.A. (ATH:FOYRK) has announced that it will be increasing its dividend from last year's comparable payment on the 3rd of July to €0.12. This takes the annual payment to 2.9% of the current stock price, which is about average for the industry.

View our latest analysis for Fourlis Holdings

Fourlis Holdings' Earnings Easily Cover The Distributions

Unless the payments are sustainable, the dividend yield doesn't mean too much. Prior to this announcement, Fourlis Holdings' earnings easily covered the dividend, but free cash flows were negative. We think that cash flows should take priority over earnings, so this is definitely a worry for the dividend going forward.

Looking forward, earnings per share could rise by 6.7% over the next year if the trend from the last few years continues. If the dividend continues along recent trends, we estimate the payout ratio will be 30%, which is in the range that makes us comfortable with the sustainability of the dividend.

Fourlis Holdings Is Still Building Its Track Record

Fourlis Holdings' 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. The annual payment during the last 6 years was €0.10 in 2018, and the most recent fiscal year payment was €0.12. This implies that the company grew its distributions at a yearly rate of about 3.1% over that duration. Fourlis Holdings hasn't been paying a dividend for very long, so we wouldn't get to excited about its record of growth just yet.

We Could See Fourlis Holdings' Dividend Growing

The company's investors will be pleased to have been receiving dividend income for some time. Fourlis Holdings has impressed us by growing EPS at 6.7% per year over the past five years. Growth in EPS bodes well for the dividend, as does the low payout ratio that the company is currently reporting.

Our Thoughts On Fourlis Holdings' Dividend

Overall, this is probably not a great income stock, even though the dividend is being raised at the moment. While Fourlis Holdings is earning enough to cover the payments, the cash flows are lacking. Overall, we don't think this company has the makings of a good income stock.

Investors generally tend to favour companies with a consistent, stable dividend policy as opposed to those operating an irregular one. At the same time, there are other factors our readers should be conscious of before pouring capital into a stock. To that end, Fourlis Holdings has 2 warning signs (and 1 which is a bit unpleasant) we think you should know about. If you are a dividend investor, you might also want to look at our curated list of high yield dividend stocks.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.