ASSA ABLOY's (STO:ASSA B) Dividend Will Be SEK2.95

ASSA ABLOY AB (publ) (STO:ASSA B) has announced that it will pay a dividend of SEK2.95 per share on the 14th of November. This takes the dividend yield to 1.9%, which shareholders will be pleased with.

Our free stock report includes 1 warning sign investors should be aware of before investing in ASSA ABLOY. Read for free now.

ASSA ABLOY's Payment Could Potentially Have Solid Earnings Coverage

Impressive dividend yields are good, but this doesn't matter much if the payments can't be sustained. Based on the last payment, ASSA ABLOY was quite comfortably earning enough to cover the dividend. This means that a large portion of its earnings are being retained to grow the business.

The next year is set to see EPS grow by 40.7%. Assuming the dividend continues along recent trends, we think the payout ratio could be 35% by next year, which is in a pretty sustainable range.

See our latest analysis for ASSA ABLOY

ASSA ABLOY Has A Solid Track Record

The company has an extended history of paying stable dividends. Since 2015, the annual payment back then was SEK2.17, compared to the most recent full-year payment of SEK5.90. This works out to be a compound annual growth rate (CAGR) of approximately 11% a year over that time. 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 Has Growth Potential

Investors could be attracted to the stock based on the quality of its payment history. ASSA ABLOY has impressed us by growing EPS at 8.7% per year over the past five years. The company is paying a reasonable amount of earnings to shareholders, and is growing earnings at a decent rate so we think it could be a decent dividend stock.

We Really Like ASSA ABLOY's Dividend

Overall, a dividend increase is always good, and we think that ASSA ABLOY 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.

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. For example, we've picked out 1 warning sign for ASSA ABLOY that investors should know about before committing capital to this stock. Looking for more high-yielding dividend ideas? Try our collection of strong dividend payers.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.