Saccheria F.lli Franceschetti (BIT:SAC) Is Increasing Its Dividend To €0.061

The board of Saccheria F.lli Franceschetti S.p.A. (BIT:SAC) has announced that it will be increasing its dividend by 45% on the 14th of May to €0.061, up from last year's comparable payment of €0.042. This makes the dividend yield 3.8%, which is above the industry average.

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Saccheria F.lli Franceschetti's Future Dividends May Potentially Be At Risk

We like to see robust dividend yields, but that doesn't matter if the payment isn't sustainable. However, Saccheria F.lli Franceschetti's earnings easily cover the dividend. This means that most of its earnings are being retained to grow the business.

EPS is set to fall by 23.6% over the next 12 months if recent trends continue. If the dividend continues along recent trends, we estimate the payout ratio could reach 105%, which could put the dividend in jeopardy if the company's earnings don't improve.

View our latest analysis for Saccheria F.lli Franceschetti

Saccheria F.lli Franceschetti Doesn't Have A Long Payment History

The dividend hasn't seen any major cuts in the past, but the company has only been paying a dividend for 2 years, which isn't that long in the grand scheme of things. Since 2023, the dividend has gone from €0.041 total annually to €0.042. This works out to be a compound annual growth rate (CAGR) of approximately 1.2% a year over that time. We like that the dividend hasn't been shrinking. However we're conscious that the company hasn't got an overly long track record of dividend payments yet, which makes us wary of relying on its dividend income.

The Dividend Has Limited Growth Potential

Investors who have held shares in the company for the past few years will be happy with the dividend income they have received. However, things aren't all that rosy. Saccheria F.lli Franceschetti's earnings per share is down 24% over the past year. That's not great to see, but there could be a number of reasons for this. Should the decline continue, we would become concerned. However, we would never make any decisions based on only a single year of data, especially when assessing long term dividend potential.

Our Thoughts On Saccheria F.lli Franceschetti's Dividend

Overall, we always like to see the dividend being raised, but we don't think Saccheria F.lli Franceschetti will make a great income stock. In the past, the payments have been unstable, but over the short term the dividend could be reliable, with the company generating enough cash to cover it. We don't think Saccheria F.lli Franceschetti is a great stock to add to your portfolio if income is your focus.

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. As an example, we've identified 1 warning sign for Saccheria F.lli Franceschetti 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.