Stock Analysis

Cyfrowy Polsat (WSE:CPS) Will Pay A Dividend Of PLN1.20

  •  Updated
WSE:CPS
Source: Shutterstock

The board of Cyfrowy Polsat S.A. (WSE:CPS) has announced that it will pay a dividend of PLN1.20 per share on the 15th of December. This means the dividend yield will be fairly typical at 6.2%.

See our latest analysis for Cyfrowy Polsat

Cyfrowy Polsat's Dividend Is Well Covered By Earnings

While it is always good to see a solid dividend yield, we should also consider whether the payment is feasible. Before making this announcement, Cyfrowy Polsat was easily earning enough to cover the dividend. As a result, a large proportion of what it earned was being reinvested back into the business.

Over the next year, EPS is forecast to fall by 72.1%. Assuming the dividend continues along recent trends, we think the payout ratio could reach 79%, which is definitely on the higher side.

historic-dividend
WSE:CPS Historic Dividend August 8th 2022

Cyfrowy Polsat's Dividend Has Lacked Consistency

Cyfrowy Polsat has been paying dividends for a while, but the track record isn't stellar. If the company cuts once, it definitely isn't argument against the possibility of it cutting in the future. The dividend has gone from an annual total of PLN0.32 in 2017 to the most recent total annual payment of PLN1.20. This means that it has been growing its distributions at 30% per annum over that time. It is great to see strong growth in the dividend payments, but cuts are concerning as it may indicate the payout policy is too ambitious.

The Dividend Looks Likely To Grow

With a relatively unstable dividend, it's even more important to evaluate if earnings per share is growing, which could point to a growing dividend in the future. It's encouraging to see that Cyfrowy Polsat has been growing its earnings per share at 30% 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.

Cyfrowy Polsat Looks Like A Great Dividend Stock

Overall, we think that this is a great income investment, and we think that maintaining the dividend this year may have been a conservative choice. The distributions are easily covered by earnings, and there is plenty of cash being generated as well. However, it is worth noting that the earnings are expected to fall over the next year, which may not change the long term outlook, but could affect the dividend payment in the next 12 months. 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. Meanwhile, despite the importance of dividend payments, they are not the only factors our readers should know when assessing a company. For example, we've identified 4 warning signs for Cyfrowy Polsat (1 shouldn't be ignored!) that you should be aware of before investing. Looking for more high-yielding dividend ideas? Try our collection of strong dividend payers.

Valuation is complex, but we're helping make it simple.

Find out whether Cyfrowy Polsat is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.

View the Free Analysis

About WSE:CPS

Cyfrowy Polsat

Cyfrowy Polsat S.A. provides digital satellite platform and terrestrial television (TV), and telecommunication services in Poland.

The Snowflake is a visual investment summary with the score of each axis being calculated by 6 checks in 5 areas.

Analysis AreaScore (0-6)
Valuation5
Future Growth3
Past Performance2
Financial Health2
Dividends2

Read more about these checks in the individual report sections or in our analysis model.

Undervalued with moderate growth potential.