Fourlis Holdings (ATH:FOYRK) Is Paying Out A Larger Dividend Than Last Year

The board of Fourlis Holdings S.A. (ATH:FOYRK) has announced that it will be paying its dividend of €0.12 on the 3rd of July, an increased payment from last year's comparable dividend. 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' Dividend Is Well Covered By Earnings

We aren't too impressed by dividend yields unless they can be sustained over time. Based on the last payment, Fourlis Holdings was earning enough to cover the dividend, but free cash flows weren't positive. 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

It is great to see that Fourlis Holdings has been paying a stable dividend for a number of years now, however we want to be a bit cautious about whether this will remain true through a full economic cycle. Since 2018, the annual payment back then was €0.10, compared to the most recent full-year payment of €0.12. This works out to be a compound annual growth rate (CAGR) of approximately 3.1% a year over that time. Modest dividend growth is good to see, especially with the payments being relatively stable. However, the payment history is relatively short and we wouldn't want to rely on this dividend too much.

Fourlis Holdings Could Grow Its Dividend

Investors who have held shares in the company for the past few years will be happy with the dividend income they have received. Fourlis Holdings has impressed us by growing EPS at 6.7% per year over the past five years. With a decent amount of growth and a low payout ratio, we think this bodes well for Fourlis Holdings' prospects of growing its dividend payments in the future.

In Summary

In summary, while it's always good to see the dividend being raised, we don't think Fourlis Holdings' payments are rock solid. While Fourlis Holdings 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.

It's important to note that companies having a consistent dividend policy will generate greater investor confidence than those having an erratic one. Still, investors need to consider a host of other factors, apart from dividend payments, when analysing a company. Just as an example, we've come across 2 warning signs for Fourlis Holdings you should be aware of, and 1 of them shouldn't be ignored. Is Fourlis 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.