Creepy Jar (WSE:CRJ) Will Pay A Smaller Dividend Than Last Year

Creepy Jar S.A. (WSE:CRJ) has announced that on 27th of June, it will be paying a dividend ofPLN11.37, which a reduction from last year's comparable dividend. This means the annual payment is 3.2% of the current stock price, which is above the average for the industry.

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Creepy Jar's Projected Earnings Seem Likely To Cover Future Distributions

While it is great to have a strong dividend yield, we should also consider whether the payment is sustainable. Prior to this announcement, Creepy Jar's dividend was only 50% of earnings, however it was paying out 139% of free cash flows. This signals that the company is more focused on returning cash flow to shareholders, but it could mean that the dividend is exposed to cuts in the future.

Over the next year, EPS is forecast to fall by 16.0%. Assuming the dividend continues along recent trends, we believe the payout ratio could be 60%, which we are pretty comfortable with and we think is feasible on an earnings basis.

Check out our latest analysis for Creepy Jar

Creepy Jar'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 PLN21.50 in 2022, and the most recent fiscal year payment was PLN11.37. This works out to a decline of approximately 47% over that time. Declining dividends isn't generally what we look for as they can indicate that the company is running into some challenges.

The Dividend Looks Likely To Grow

With a relatively unstable dividend, and a poor history of shrinking dividends, it's even more important to see if EPS is growing. Creepy Jar has impressed us by growing EPS at 157% per year over the past five years. The company's earnings per share has grown rapidly in recent years, and it has a good balance between reinvesting and paying dividends to shareholders, so we think that Creepy Jar could prove to be a strong dividend payer.

Our Thoughts On Creepy Jar's Dividend

Overall, it's not great to see that the dividend has been cut, but this might be explained by the payments being a bit high previously. While the low payout ratio is a redeeming feature, this is offset by the minimal cash to cover the payments. Overall, we don't think this company has the makings of a good income stock.

Market movements attest to how highly valued a consistent dividend policy is compared to one which is more unpredictable. At the same time, there are other factors our readers should be conscious of before pouring capital into a stock. Just as an example, we've come across 4 warning signs for Creepy Jar you should be aware of, and 2 of them shouldn't be ignored. Is Creepy Jar not quite the opportunity you were looking for? Why not check out our selection of top dividend stocks.

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