Beijer Ref's (STO:BEIJ B) Dividend Will Be SEK0.70

Beijer Ref AB (publ)'s (STO:BEIJ B) investors are due to receive a payment of SEK0.70 per share on 30th of October. This takes the annual payment to 0.9% of the current stock price, which unfortunately is below what the industry is paying.

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Beijer Ref's Payment Could Potentially Have Solid Earnings Coverage

If it is predictable over a long period, even low dividend yields can be attractive. However, prior to this announcement, Beijer Ref's dividend was comfortably covered by both cash flow and earnings. This means that most of what the business earns is being used to help it grow.

Over the next year, EPS is forecast to expand by 37.4%. If the dividend continues along recent trends, we estimate the payout ratio will be 24%, which is in the range that makes us comfortable with the sustainability of the dividend.

View our latest analysis for Beijer Ref

Dividend Volatility

While the company has been paying a dividend for a long time, it has cut the dividend at least once in the last 10 years. Since 2015, the dividend has gone from SEK0.556 total annually to SEK1.40. This means that it has been growing its distributions at 9.7% per annum over that time. It's good to see the dividend growing at a decent rate, but the dividend has been cut at least once in the past. Beijer Ref might have put its house in order since then, but we remain cautious.

The Dividend Looks Likely To Grow

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 Beijer Ref has been growing its earnings per share at 19% a year over the past five years. Beijer Ref definitely has the potential to grow its dividend in the future with earnings on an uptrend and a low payout ratio.

We Really Like Beijer Ref's Dividend

Overall, a dividend increase is always good, and we think that Beijer Ref 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.

Investors generally tend to favour companies with a consistent, stable dividend policy as opposed to those operating an irregular one. However, there are other things to consider for investors when analysing stock performance. Earnings growth generally bodes well for the future value of company dividend payments. See if the 6 Beijer Ref analysts we track are forecasting continued growth with our free report on analyst estimates for the company. If you are a dividend investor, you might also want to look at our curated list of high yield dividend stocks.

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