AVTECH Sweden (STO:AVT B) Has Announced A Dividend Of SEK0.10

The board of AVTECH Sweden AB (publ) (STO:AVT B) has announced that it will pay a dividend of SEK0.10 per share on the 23rd of May. This payment means the dividend yield will be 1.2%, which is below the average for the industry.

We've discovered 2 warning signs about AVTECH Sweden. View them for free.

AVTECH Sweden's Future Dividend Projections Appear Well Covered By Earnings

Even a low dividend yield can be attractive if it is sustained for years on end. Prior to this announcement, AVTECH Sweden's dividend was comfortably covered by both cash flow and earnings. This indicates that quite a large proportion of earnings is being invested back into the business.

The next year is set to see EPS grow by 30.5%. If the dividend continues along recent trends, we estimate the payout ratio will be 33%, which is in the range that makes us comfortable with the sustainability of the dividend.

Check out our latest analysis for AVTECH Sweden

AVTECH Sweden Is Still Building Its Track Record

It is tough to make a judgement on how stable a dividend is when the company hasn't been paying one for very long. This doesn't mean that the company can't pay a good dividend, but just that we want to wait until it can prove itself.

The Dividend Looks Likely To Grow

The company's investors will be pleased to have been receiving dividend income for some time. AVTECH Sweden has seen EPS rising for the last five years, at 118% per annum. 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 AVTECH Sweden could prove to be a strong dividend payer.

AVTECH Sweden Looks Like A Great Dividend Stock

In summary, it is good to see that the dividend is staying consistent, and we don't think there is any reason to suspect this might change over the medium term. Distributions are quite easily covered by earnings, which are also being converted to cash flows. All of these factors considered, we think this has solid potential as a dividend stock.

Companies possessing a stable dividend policy will likely enjoy greater investor interest than those suffering from a more inconsistent approach. Meanwhile, despite the importance of dividend payments, they are not the only factors our readers should know when assessing a company. As an example, we've identified 2 warning signs for AVTECH Sweden that you should be aware of before investing. Looking for more high-yielding dividend ideas? Try our collection of strong dividend payers.

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