Eastnine (STO:EAST) Is Due To Pay A Dividend Of €0.30

Eastnine AB (publ) (STO:EAST) has announced that it will pay a dividend of €0.30 per share on the 14th of November. Even though the dividend went up, the yield is still quite low at only 2.2%.

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Estimates Indicate Eastnine's Could Struggle to Maintain Dividend Payments In The Future

Even a low dividend yield can be attractive if it is sustained for years on end. Before making this announcement, Eastnine was easily earning enough to cover the dividend. This means that most of what the business earns is being used to help it grow.

Earnings per share is forecast to rise by 20.6% over the next year. Assuming the dividend continues along recent trends, we think the payout ratio could get very high, which probably can't continue without starting to put some pressure on the balance sheet.

Check out our latest analysis for Eastnine

Eastnine Has A Solid Track Record

The company has a sustained record of paying dividends with very little fluctuation. Since 2015, the annual payment back then was €0.0225, compared to the most recent full-year payment of €0.106. This implies that the company grew its distributions at a yearly rate of about 17% over that duration. It is good to see that there has been strong dividend growth, and that there haven't been any cuts for a long time.

The Dividend Looks Likely To Grow

Investors could be attracted to the stock based on the quality of its payment history. Eastnine has impressed us by growing EPS at 12% per year over the past five years. Eastnine definitely has the potential to grow its dividend in the future with earnings on an uptrend and a low payout ratio.

We Really Like Eastnine's Dividend

Overall, we think this could be an attractive income stock, and it is only getting better by paying a higher dividend this year. The company is easily earning enough to cover its dividend payments and it is great to see that these earnings are being translated into cash flow. All in all, this checks a lot of the boxes we look for when choosing an income stock.

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. Case in point: We've spotted 3 warning signs for Eastnine (of which 2 are concerning!) you should know about. Looking for more high-yielding dividend ideas? Try our collection of strong dividend payers.

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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.