Agram banka d.d's (ZGSE:KBZ) Upcoming Dividend Will Be Larger Than Last Year's

Agram banka d.d.'s (ZGSE:KBZ) periodic dividend will be increasing on the 3rd of July to €2.15, with investors receiving 7.5% more than last year's €2.00. This takes the annual payment to 5.1% of the current stock price, which is about average for the industry.

We've discovered 2 warning signs about Agram banka d.d. View them for free.

Agram banka d.d's Earnings Will Easily Cover The Distributions

While it is always good to see a solid dividend yield, we should also consider whether the payment is feasible.

Agram banka d.d has a short history of paying out dividends, with its current track record at only 3 years. Taking data from Agram banka d.d's last earnings report, the payout ratio is at a decent 45%, meaning that the company is able to pay out its dividend with some room to spare.

Looking forward, earnings per share could rise by 22.6% over the next year if the trend from the last few years continues. Assuming the dividend continues along recent trends, we think the future payout ratio could be 44% by next year, which is in a pretty sustainable range.

View our latest analysis for Agram banka d.d

Agram banka d.d Is Still Building Its Track Record

Looking back, the dividend has been stable, but the company hasn't been paying a dividend for very long so we can't be confident that the dividend will remain stable through all economic environments. Since 2022, the dividend has gone from €1.38 total annually to €2.00. This works out to be a compound annual growth rate (CAGR) of approximately 13% a year 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 Looks Likely To Grow

Investors who have held shares in the company for the past few years will be happy with the dividend income they have received. Agram banka d.d has impressed us by growing EPS at 23% per year over the past three years. The company doesn't have any problems growing, despite returning a lot of capital to shareholders, which is a very nice combination for a dividend stock to have.

We Really Like Agram banka d.d's Dividend

Overall, a dividend increase is always good, and we think that Agram banka d.d is a strong income stock thanks to its track record and growing earnings. Earnings are easily covering distributions, and the company is generating plenty of cash. 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. To that end, Agram banka d.d 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.