ANY Biztonsági Nyomda Nyrt's (BUSE:ANY) Shareholders Will Receive A Bigger Dividend Than Last Year

ANY Biztonsági Nyomda Nyrt. (BUSE:ANY) has announced that it will be increasing its dividend from last year's comparable payment on the 15th of July to HUF250.00. This makes the dividend yield 7.0%, which is above the industry average.

While the dividend yield is important for income investors, it is also important to consider any large share price moves, as this will generally outweigh any gains from distributions. Investors will be pleased to see that ANY Biztonsági Nyomda Nyrt's stock price has increased by 38% in the last 3 months, which is good for shareholders and can also explain a decrease in the dividend yield.

Check out our latest analysis for ANY Biztonsági Nyomda Nyrt

ANY Biztonsági Nyomda Nyrt's Earnings Easily Cover The Distributions

While it is great to have a strong dividend yield, we should also consider whether the payment is sustainable. Before making this announcement, ANY Biztonsági Nyomda Nyrt was paying out a fairly large proportion of earnings, and it wasn't generating positive free cash flows either. Generally, we think that this would be a risky long term practice.

Over the next year, EPS could expand by 30.2% if recent trends continue. If the dividend continues along recent trends, we estimate the payout ratio will be 72%, which would make us comfortable with the sustainability of the dividend, despite the levels currently being quite high.

ANY Biztonsági Nyomda Nyrt Has A Solid Track Record

The company has an extended history of paying stable dividends. Since 2014, the annual payment back then was HUF55.00, compared to the most recent full-year payment of HUF250.00. This means that it has been growing its distributions at 16% per annum over that time. It is good to see that there has been strong dividend growth, and that there haven't been any cuts for a long time.

Dividend Growth Could Be Constrained

Investors could be attracted to the stock based on the quality of its payment history. It's encouraging to see that ANY Biztonsági Nyomda Nyrt has been growing its earnings per share at 30% a year over the past five years. EPS is growing rapidly, although the company is also paying out a large portion of its profits as dividends. If earnings keep growing, the dividend may be sustainable, but generally we'd prefer to see a fast growing company reinvest in further growth.

In Summary

Overall, we always like to see the dividend being raised, but we don't think ANY Biztonsági Nyomda Nyrt will make a great income stock. Although they have been consistent in the past, we think the payments are a little high to be sustained. We would probably look elsewhere for an income investment.

It's important to note that companies having a consistent dividend policy will generate greater investor confidence than those having an erratic one. At the same time, there are other factors our readers should be conscious of before pouring capital into a stock. For example, we've identified 3 warning signs for ANY Biztonsági Nyomda Nyrt (2 can't be ignored!) 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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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.