BNP Paribas Bank Polska (WSE:BNP) Is Increasing Its Dividend To PLN7.86

BNP Paribas Bank Polska S.A. (WSE:BNP) will increase its dividend on the 9th of May to PLN7.86, which is 130% higher than last year's payment from the same period of PLN3.41. This makes the dividend yield about the same as the industry average at 3.2%.

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 BNP Paribas Bank Polska's stock price has increased by 30% 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 BNP Paribas Bank Polska

BNP Paribas Bank Polska's Dividend Forecasted To Be Well Covered By Earnings

We like a dividend to be consistent over the long term, so checking whether it is sustainable is important.

Currently, BNP Paribas Bank Polska does not yet have a history of paying dividends out, with this being its first year doing so. Based on BNP Paribas Bank Polska's last earnings report, calculating for its payout ratio equates to 34%, which means that the company covered its last dividend with comfortable room to spare.

Over the next 3 years, EPS is forecast to expand by 0.6%. Analysts estimate the future payout ratio will be 46% over the same time period, which is in the range that makes us comfortable with the sustainability of the dividend.

BNP Paribas Bank Polska Doesn't Have A Long Payment History

The company hasn't been paying a dividend for very long at all, so we can't really make a judgement on how stable the dividend has been. This doesn't mean that the company can't pay a good dividend, but just that we want to wait until it can prove itself.

The Dividend Looks Likely To Grow

Investors could be attracted to the stock based on the quality of its payment history. It's encouraging to see that BNP Paribas Bank Polska has been growing its earnings per share at 31% a year over the past five years. A low payout ratio gives the company a lot of flexibility, and growing earnings also make it very easy for it to grow the dividend.

Our Thoughts On BNP Paribas Bank Polska's Dividend

Overall, we always like to see the dividend being raised, but we don't think BNP Paribas Bank Polska will make a great income stock. The low payout ratio is a redeeming feature, but generally we are not too happy with the payments BNP Paribas Bank Polska has been making. This company is not in the top tier of income providing stocks.

Investors generally tend to favour companies with a consistent, stable dividend policy as opposed to those operating an irregular one. Meanwhile, despite the importance of dividend payments, they are not the only factors our readers should know when assessing a company. Just as an example, we've come across 2 warning signs for BNP Paribas Bank Polska you should be aware of, and 1 of them shouldn't be ignored. Is BNP Paribas Bank Polska 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.