Polski Holding Nieruchomosci's (WSE:PHN) Dividend Is Being Reduced To PLN0.08

Polski Holding Nieruchomosci S.A. (WSE:PHN) is reducing its dividend to PLN0.08 on the 31st of Augustwhich is 78% less than last year's comparable payment of PLN0.36. This means that the dividend yield is 3.1%, which is a bit low when comparing to other companies in the industry.

View our latest analysis for Polski Holding Nieruchomosci

Polski Holding Nieruchomosci Is Paying Out More Than It Is Earning

While yield is important, another factor to consider about a company's dividend is whether the current payout levels are feasible. Before making this announcement, Polski Holding Nieruchomosci was easily earning enough to cover the dividend. This means that most of what the business earns is being used to help it grow.

EPS is set to fall by 50.6% over the next 12 months if recent trends continue. If the dividend continues along the path it has been on recently, the payout ratio in 12 months could be 474%, which is definitely a bit high to be sustainable going forward.

Polski Holding Nieruchomosci's Dividend Has Lacked Consistency

Looking back, Polski Holding Nieruchomosci's dividend hasn't been particularly consistent. This suggests that the dividend might not be the most reliable. Since 2015, the dividend has gone from PLN1.30 total annually to PLN0.36. The dividend has fallen 72% over that period. Declining dividends isn't generally what we look for as they can indicate that the company is running into some challenges.

Dividend Growth Potential Is Shaky

Given that the track record hasn't been stellar, we really want to see earnings per share growing over time. Earnings per share has been sinking by 51% over the last five years. This steep decline can indicate that the business is going through a tough time, which could constrain its ability to pay a larger dividend each year in the future.

In Summary

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. The payments haven't been particularly stable and we don't see huge growth potential, but with the dividend well covered by cash flows it could prove to be reliable over the short term. Overall, we don't think this company has the makings of a good income stock.

Companies possessing a stable dividend policy will likely enjoy greater investor interest than those suffering from a more inconsistent approach. 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 3 warning signs for Polski Holding Nieruchomosci you should be aware of, and 1 of them is a bit concerning. Looking for more high-yielding dividend ideas? Try our collection of strong dividend payers.

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