Stock Analysis

Atlantic Grupa d.d (ZGSE:ATGR) Has Announced That It Will Be Increasing Its Dividend To Kn50.00

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The board of Atlantic Grupa d.d. (ZGSE:ATGR) has announced that the dividend on 5th of July will be increased to Kn50.00, which will be 25% higher than last year. This takes the dividend yield from 2.4% to 3.0%, which shareholders will be pleased with.

Check out our latest analysis for Atlantic Grupa d.d

Atlantic Grupa d.d's Dividend Is Well Covered By Earnings

Impressive dividend yields are good, but this doesn't matter much if the payments can't be sustained. However, Atlantic Grupa d.d's earnings easily cover the dividend. As a result, a large proportion of what it earned was being reinvested back into the business.

If the trend of the last few years continues, EPS will grow by 15.7% over the next 12 months. Assuming the dividend continues along recent trends, we think the payout ratio could be 49% by next year, which is in a pretty sustainable range.

ZGSE:ATGR Historic Dividend May 8th 2022

Atlantic Grupa d.d's Dividend Has Lacked Consistency

Looking back, Atlantic Grupa d.d's dividend hasn't been particularly consistent. This makes us cautious about the consistency of the dividend over a full economic cycle. The first annual payment during the last 9 years was Kn9.00 in 2013, and the most recent fiscal year payment was Kn40.00. This works out to be a compound annual growth rate (CAGR) of approximately 18% a year over that time. Atlantic Grupa d.d has grown distributions at a rapid rate despite cutting the dividend at least once in the past. Companies that cut once often cut again, so we would be cautious about buying this stock solely for the dividend income.

The Dividend Looks Likely To Grow

With a relatively unstable dividend, it's even more important to see if earnings per share is growing. Atlantic Grupa d.d has seen EPS rising for the last five years, at 16% per annum. Atlantic Grupa d.d definitely has the potential to grow its dividend in the future with earnings on an uptrend and a low payout ratio.

Atlantic Grupa d.d 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. 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.

Market movements attest to how highly valued a consistent dividend policy is compared to one which is more unpredictable. At the same time, there are other factors our readers should be conscious of before pouring capital into a stock. As an example, we've identified 1 warning sign for Atlantic Grupa d.d that you should be aware of before investing. Looking for more high-yielding dividend ideas? Try our collection of strong dividend payers.

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Atlantic Grupa d.d

Atlantic Grupa d.d., together with its subsidiaries, engages in the research, development, production, and distribution fast moving consumer goods in Southeast Europe, the European markets, Russia, and the Commonwealth of Independent States.

Flawless balance sheet second-rate dividend payer.