Malta International Airport (MTSE:MIA) Is Due To Pay A Dividend Of €0.06

Malta International Airport p.l.c.'s (MTSE:MIA) investors are due to receive a payment of €0.06 per share on 13th of September. This takes the dividend yield to 3.9%, which shareholders will be pleased with.

Check out our latest analysis for Malta International Airport

Malta International Airport's Dividend Is Well Covered By Earnings

A big dividend yield for a few years doesn't mean much if it can't be sustained. At the time of the last dividend payment, Malta International Airport was paying out a very large proportion of what it was earning and 135% of cash flows. Paying out such a high proportion of cash flows can expose the business to needing to cut the dividend if the business runs into some challenges.

Over the next year, EPS could expand by 7.5% if recent trends continue. Under the assumption that the dividend will continue along recent trends, we think the payout ratio could be 64% which would be quite comfortable going to take the dividend forward.

Dividend Volatility

While the company has been paying a dividend for a long time, it has cut the dividend at least once in the last 10 years. Since 2014, the annual payment back then was €0.108, compared to the most recent full-year payment of €0.231. This works out to be a compound annual growth rate (CAGR) of approximately 7.9% a year over that time. A reasonable rate of dividend growth is good to see, but we're wary that the dividend history is not as solid as we'd like, having been cut at least once.

Malta International Airport Could Grow Its Dividend

With a relatively unstable dividend, it's even more important to see if earnings per share is growing. Malta International Airport has seen EPS rising for the last five years, at 7.5% per annum. The payout ratio is very much on the higher end, which could mean that the growth rate will slow down in the future, and that could flow through to the dividend as well.

Malta International Airport's Dividend Doesn't Look Sustainable

Overall, we always like to see the dividend being raised, but we don't think Malta International Airport will make a great income stock. The payments are bit high to be considered sustainable, and the track record isn't the best. We would probably look elsewhere for an income investment.

Investors generally tend to favour companies with a consistent, stable dividend policy as opposed to those operating an irregular one. However, there are other things to consider for investors when analysing stock performance. For example, we've picked out 1 warning sign for Malta International Airport that investors should know about before committing capital to this stock. Is Malta International Airport not quite the opportunity you were looking for? Why not check out our selection of top dividend stocks.

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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.

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