Grupa Pracuj (WSE:GPP) Is Increasing Its Dividend To PLN2.10

Grupa Pracuj S.A. (WSE:GPP) has announced that it will be increasing its dividend from last year's comparable payment on the 2nd of July to PLN2.10. This will take the dividend yield to an attractive 3.4%, providing a nice boost to shareholder returns.

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Grupa Pracuj's Projected Earnings Seem Likely To Cover Future Distributions

Impressive dividend yields are good, but this doesn't matter much if the payments can't be sustained. The last dividend was quite easily covered by Grupa Pracuj's earnings. This indicates that quite a large proportion of earnings is being invested back into the business.

The next year is set to see EPS grow by 58.8%. If the dividend continues on this path, the payout ratio could be 44% by next year, which we think can be pretty sustainable going forward.

See our latest analysis for Grupa Pracuj

Grupa Pracuj's Dividend Has Lacked Consistency

Looking back, the company hasn't been paying the most consistent dividend, but with such a short dividend history it could be too early to draw solid conclusions. The annual payment during the last 3 years was PLN2.00 in 2022, and the most recent fiscal year payment was PLN2.10. This works out to be a compound annual growth rate (CAGR) of approximately 1.6% a year over that time. The dividend has seen some fluctuations in the past, so even though the dividend was raised this year, we should remember that it has been cut in the past.

The Dividend Looks Likely To Grow

With a relatively unstable dividend, it's even more important to see if earnings per share is growing. Grupa Pracuj has impressed us by growing EPS at 14% per year over the past five years. Shareholders are getting plenty of the earnings returned to them, which combined with strong growth makes this quite appealing.

Grupa Pracuj Looks Like A Great Dividend Stock

In summary, it is always positive to see the dividend being increased, and we are particularly pleased with its overall sustainability. Earnings are easily covering distributions, and the company is generating plenty of cash. All of these factors considered, we think this has solid potential as a dividend stock.

It's important to note that companies having a consistent dividend policy will generate greater investor confidence than those having an erratic 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 1 warning sign for Grupa Pracuj that investors should take into consideration. Is Grupa Pracuj not quite the opportunity you were looking for? Why not check out our selection of top dividend stocks.

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