Nordic Asia Investment Group 1987 (STO:NAIG B) Is Increasing Its Dividend To SEK0.20

Nordic Asia Investment Group 1987 AB (publ) (STO:NAIG B) has announced that it will be increasing its dividend from last year's comparable payment on the 13th of June to SEK0.20. This will take the annual payment to 7.4% of the stock price, which is above what most companies in the industry pay.

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Nordic Asia Investment Group 1987's Distributions May Be Difficult To Sustain

We like to see robust dividend yields, but that doesn't matter if the payment isn't sustainable. Even though Nordic Asia Investment Group 1987 is not generating a profit, it is still paying a dividend. Along with this, it is also not generating free cash flows, which raises concerns about the sustainability of the dividend.

Looking forward, earnings per share could rise by 9.5% over the next year if the trend from the last few years continues. While it is good to see income moving in the right direction, it still looks like the company won't achieve profitability. Unfortunately, for the dividend to continue at current levels the company definitely needs to get there sooner rather than later.

View our latest analysis for Nordic Asia Investment Group 1987

Nordic Asia Investment Group 1987 Doesn't Have A Long Payment History

The company has maintained a consistent dividend for a few years now, but we would like to see a longer track record before relying on it. Since 2022, the dividend has gone from SEK0.08 total annually to SEK0.20. This means that it has been growing its distributions at 36% per annum over that time. We're not overly excited about the relatively short history of dividend payments, however the dividend is growing at a nice rate and we might take a closer look.

Nordic Asia Investment Group 1987 Could Grow Its Dividend

Investors who have held shares in the company for the past few years will be happy with the dividend income they have received. It's encouraging to see that Nordic Asia Investment Group 1987 has been growing its earnings per share at 9.5% a year over the past five years. It's not an ideal situation that the company isn't turning a profit but the growth recently is a positive sign. Assuming the company can post positive net income numbers soon, it could has the potential to be a decent dividend payer.

Nordic Asia Investment Group 1987's Dividend Doesn't Look Sustainable

Overall, this is probably not a great income stock, even though the dividend is being raised at the moment. In general, the distributions are a little bit higher than we would like, but we can't ignore the fact the quickly growing earnings gives this stock great potential in the future. 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. Meanwhile, despite the importance of dividend payments, they are not the only factors our readers should know when assessing a company. For example, we've picked out 5 warning signs for Nordic Asia Investment Group 1987 that investors should know about before committing capital to this stock. 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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