Addtech AB (publ.)'s (STO:ADDT B) Upcoming Dividend Will Be Larger Than Last Year's

Addtech AB (publ.)'s (STO:ADDT B) dividend will be increasing from last year's payment of the same period to SEK2.50 on 30th of August. The payment will take the dividend yield to 1.2%, which is in line with the average for the industry.

Check out our latest analysis for Addtech AB (publ.)

Addtech AB (publ.)'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. Based on the last payment, Addtech AB (publ.) was quite comfortably earning enough to cover the dividend. This indicates that a lot of the earnings are being reinvested into the business, with the aim of fueling growth.

The next year is set to see EPS grow by 37.8%. Assuming the dividend continues along recent trends, we think the payout ratio could be 36% by next year, which is in a pretty sustainable range.

Addtech AB (publ.) Has A Solid Track Record

The company has an extended history of paying stable dividends. Since 2013, the dividend has gone from SEK0.667 total annually to SEK2.50. This implies that the company grew its distributions at a yearly rate of about 14% over that duration. We can see that payments have shown some very nice upward momentum without faltering, which provides some reassurance that future payments will also be reliable.

The Dividend Looks Likely To Grow

Investors who have held shares in the company for the past few years will be happy with the dividend income they have received. We are encouraged to see that Addtech AB (publ.) has grown earnings per share at 24% 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 Addtech AB (publ.) could prove to be a strong dividend payer.

We Really Like Addtech AB (publ.)'s Dividend

Overall, a dividend increase is always good, and we think that Addtech AB (publ.) is a strong income stock thanks to its track record and growing earnings. Distributions are quite easily covered by earnings, which are also being converted to cash flows. Taking this all into consideration, this looks like it could be a good dividend opportunity.

Companies possessing a stable dividend policy will likely enjoy greater investor interest than those suffering from a more inconsistent approach. However, there are other things to consider for investors when analysing stock performance. As an example, we've identified 2 warning signs for Addtech AB (publ.) that you should be aware of before investing. Is Addtech AB (publ.) 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.