Orsero (BIT:ORS) Has Announced That Its Dividend Will Be Reduced To €0.50

Orsero S.p.A.'s (BIT:ORS) dividend is being reduced from last year's payment covering the same period to €0.50 on the 14th of May. This means the annual payment is 4.1% of the current stock price, which is above the average for the industry.

Check out our latest analysis for Orsero

Orsero's Future Dividend Projections Appear Well Covered By Earnings

A big dividend yield for a few years doesn't mean much if it can't be sustained. However, Orsero's earnings easily cover the dividend. This means that most of what the business earns is being used to help it grow.

EPS is set to fall by 1.7% over the next 12 months. If the dividend continues along the path it has been on recently, we estimate the payout ratio could be 40%, which is comfortable for the company to continue in the future.

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Orsero Doesn't Have A Long Payment History

It is great to see that Orsero 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 €0.12, compared to the most recent full-year payment of €0.50. This implies that the company grew its distributions at a yearly rate of about 23% over that duration. It is always nice to see strong dividend growth, but with such a short payment history we wouldn't be inclined to rely on it until a longer track record can be developed.

The Dividend Looks Likely To Grow

The company's investors will be pleased to have been receiving dividend income for some time. It's encouraging to see that Orsero has been growing its earnings per share at 68% a year over the past five years. Earnings have been growing rapidly, and with a low payout ratio we think that the company could turn out to be a great dividend stock.

Orsero Looks Like A Great Dividend Stock

Overall, we think that Orsero could be a great option for a dividend investment, although we would have preferred if the dividend wasn't cut this year. The cut will allow the company to continue paying out the dividend without putting the balance sheet under pressure, which means that it could remain sustainable for longer. 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. For instance, we've picked out 2 warning signs for Orsero that investors should take into consideration. Is Orsero not quite the opportunity you were looking for? Why not check out our selection of top dividend stocks.

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