Neptis Spólka Akcyjna's (WSE:YAN) Shareholders Will Receive A Bigger Dividend Than Last Year

Neptis Spólka Akcyjna (WSE:YAN) has announced that it will be increasing its dividend from last year's comparable payment on the 4th of July to PLN5.62. This will take the dividend yield to an attractive 4.5%, providing a nice boost to shareholder returns.

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Neptis Spólka Akcyjna's Projections Indicate Future Payments May Be Unsustainable

We like to see robust dividend yields, but that doesn't matter if the payment isn't sustainable. Based on the last payment, Neptis Spólka Akcyjna's profits didn't cover the dividend, but the company was generating enough cash instead. Healthy cash flows are always a positive sign, especially when they quite easily cover the dividend.

Earnings per share could rise by 33.7% over the next year if things go the same way as they have for the last few years. If the dividend continues on its recent course, the payout ratio in 12 months could be 132%, which is a bit high and could start applying pressure to the balance sheet.

Check out our latest analysis for Neptis Spólka Akcyjna

Neptis Spólka Akcyjna'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 dividend has gone from an annual total of PLN1.82 in 2022 to the most recent total annual payment of PLN5.62. This works out to be a compound annual growth rate (CAGR) of approximately 46% a year over that time. Dividends have grown rapidly over this time, but with cuts in the past we are not certain that this stock will be a reliable source of income in the future.

Neptis Spólka Akcyjna's Dividend Might Lack Growth

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 Neptis Spólka Akcyjna has been growing its earnings per share at 34% a year over the past three years. EPS has been growing well, but Neptis Spólka Akcyjna has been paying out a massive proportion of its earnings, which can make the dividend tough to maintain.

In Summary

Overall, we always like to see the dividend being raised, but we don't think Neptis Spólka Akcyjna will make a great income stock. The company is generating plenty of cash, which could maintain the dividend for a while, but the track record hasn't been great. We would be a touch cautious of relying on this stock primarily for the dividend income.

Market movements attest to how highly valued a consistent dividend policy is compared to one which is more unpredictable. However, there are other things to consider for investors when analysing stock performance. As an example, we've identified 2 warning signs for Neptis Spólka Akcyjna that you should be aware of before investing. Is Neptis Spólka Akcyjna 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.